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Item 9A. Controls and Procedures

2025-09-29 compared with 2024-09-30 · 1088 added, 849 removed, 905 unchanged (68% of the section changed)

2 unchanged sentences

Our management has evaluated,

under the supervision and with the participation of OC Kim, our President, and Bill Bauer, our Acting Chief Financial Officer, the effectiveness

of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of

the end of the period covered by this report.

Based upon that evaluation, our President and the Acting Chief Financial Officer have concluded

that, as of June 30, 2024, our disclosure controls and procedures were effective in ensuring that information required to be disclosed

by us in the reports that we file or submit under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized, and reported

within the time periods specified in the rules and forms of the SEC and (ii) accumulated and communicated to our management, including

our principal executive and principal accounting officers, or persons performing similar functions, as appropriate to allow timely decisions

regarding required disclosure.

under the supervision and with the participation of OC Kim, our President, and Reid Granados, our Acting Chief Financial Officer, the

effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act

of 1934) as of the end of the period covered by this report.

Based upon that evaluation, our President and the Acting Chief Financial

Officer have concluded that, as of June 30, 2025, our disclosure controls and procedures were effective in ensuring that information required

to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized,

and reported within the time periods specified in the rules and forms of the SEC and (ii) accumulated and communicated to our management,

including our principal executive and principal financial and accounting officers, or persons performing similar functions, as appropriate

to allow timely decisions regarding required disclosure.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There have been no changes in

our internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act or in other factors

that materially affected or are reasonably likely to materially affect our internal controls and procedures over financial reporting during

the fourth quarter of the fiscal year ended June 30, 2024.

There have been no changes

in our internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) or in other

factors that materially affected or are reasonably likely to materially affect our internal controls and procedures over financial reporting

during the fourth quarter of the fiscal year ended June 30, 2025.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

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OTHER INFORMATION

During the quarter ended

June 30, 2024, no director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement,

as each term is defined in Item 408(a) of Regulation S-K.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS

THAT PREVENT INSPECTIONS.

During the quarter

ended June 30, 2025, no director or officer adopted or terminated any Rule 10b5-1 trading arrangement or

non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.

DISCLOSURE REGARDING FOREIGN

JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable

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ages, titles and present and past positions of our directors and executive officers as of June 30, 2025.

President, Secretary and a Director

Chairman of the Board and a Director

President, CEO and a Director

Johnathan Chee

Chief Operating Officer

Acting Chief Financial Officer (Principal Financial Officer)

Chairman of the Board and a Director

Ira Greenstein

Reid Granados

Acting Chief Financial Officer (Principal Financial Officer), and Director of Logistics

Secretary, General Counsel, and Director of Strategic Affairs

Senior Vice President of Sales

OC Kim has been our President,

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knowledge of the Company’s business, products, strategic relationships and future opportunities is of great value to the Company.

Gary Nelson has been a director

since September 2003.

Nelson was an early investor in Franklin Telecommunications Corp.

in the 1980’s and served as a director

from 2001 up until the Company’s merger with Accetio Inc.

in September 2003, at which time the Company was renamed Franklin Wireless

Following the merger, Mr.

Nelson became a director and ultimately Chairman of the Board of Franklin Wireless Corp.

He was co-founder

and President of Churchill Mortgage Corporation, an income property mortgage banking firm based in Los Angeles, California, which was

a loan correspondent for major life insurance companies and other financial institutions.

In addition, Mr.

Nelson was the Chief Operating

Officer of Churchill Mortgage Capital, which was the loan origination arm of Churchill Mortgage Corporation.

Nelson’s prior

experience includes various marketing positions with Control Data Corporation and design engineering positions with North American Aviation

where he worked on the Apollo Project.

He holds a B.S.

in Mechanical Engineering from Kansas State University and an MBA from the University

of Southern California.

We believe that Mr.

Nelson’s qualifications to serve as a director of the Company include his many

years of business, operational and management experience including his previous position as President of Churchill Mortgage Corporation.

In addition, Mr.

Nelson has served as a director of the Company for 14 years, and brings a valuable historical perspective on the development

of the Company’s business and its leadership.

Johnathan Chee has been a

director since September 2009.

He is an attorney and has owned the Law Offices of Johnathan Chee, in Niles, Illinois, since August

Chee has represented clients in various business dealings and negotiations with Ameritech, SBC, Sprint and several wireless

carriers in Latin America.

Between 1998 and 2007, he served as an attorney with the C&S Law Group, P.C., in Glenview, Illinois.

Johnathan Chee has served

as a director since September 2009 and became Chairman in February 2025.

He is an attorney and has owned the Law Offices of Johnathan

Chee, in Niles, Illinois, since August 2007.

Chee has represented clients in various business dealings and negotiations with Ameritech,

SBC, Sprint and several wireless carriers in Latin America.

Between 1998 and 2007, he served as an attorney with the C&S Law Group,

P.C., in Glenview, Illinois.

He holds a B.A.

from the University of Illinois-Chicago and a J.D.

from IIT Chicago-Kent College of Law.

He is a member of the Illinois Bar

He is a member of the Illinois Bar Association.

We believe Mr.

Chee’s qualifications to serve as a director of the Company include his experience as a business attorney

that allow him to provide the Company’s Board of Directors with valuable knowledge of legal matters that may affect the Company.

Heidy Chow is a Certified Public

Accountant and an experienced finance and accounting executive whose client base includes several IT companies.

Chow is an Assurance

Partner of The Pun Group, LLP and has over fifteen (15) years of combined experience in auditing, consulting and finance.

career in public accounting was spent primarily with the National firms of RSM US and Ernst & Young, and regional firms where she

has specialized in corporate accounting and auditing services.

She supervises engagement teams in areas of designing and planning audits

in accordance with the AICPA Generally Accepted Auditing Standards and Public Company Accounting Oversight Board (PCAOB) standards.

addition, she often serves as Contract Chief Financial Officer for privately held small and middle market companies.

She holds a B.S.

in Accounting from California State Polytechnic University, Pomona.

Kristina Kim is a licensed attorney

with extensive knowledge of global import/export, international trade, and regulatory issues.

Kim also served as General Counsel and

Vice President with Samsung International Inc.

Chee’s qualifications to serve as Chairman of the Board and a director

of the Company include his experience as a business attorney that allow him to provide the Company’s Board of Directors with valuable

knowledge of legal matters that may affect the Company.

Heidy Chow is a Certified

Public Accountant and has served as Chief Financial Officer of Snail Inc., a NASDAQ-listed global developer and publisher of interactive

digital entertainment, since 2022, and Chief Financial officer of Snail Games USA, Inc.

since September 2020.

In June 2024, Ms.

appointed to the board of directors of VirnetX Holding Corporation, a global leader in communication security.

Previously, she was an

Assurance Partner with The Pun Group, LLP, where her client base included several IT companies.

Chow has more than twenty years of

experience in auditing, consulting, and finance.

Her career in public accounting was spent primarily with national firms RSM US and Ernst

& Young, as well as regional firms, where she specialized in corporate accounting and auditing services.

She has supervised engagement

teams in the design and execution of audits in accordance with standards established by the American Institute of Certified Public Accountants

(AICPA) and the Public Company Accounting Oversight Board (PCAOB).

Chow holds a B.S.

in Accounting from California State Polytechnic

University, Pomona.

Chow also serves as Chair

of our Audit Committee.

Our Board of Directors has determined that Ms.

Chow qualifies as an “audit committee financial expert,”

as defined by SEC rules, and that she is independent under the applicable NASDAQ listing standards.

Kristina Kim is a licensed

attorney with extensive knowledge of global import/export, international trade, and regulatory issues.

Kim also served as General

Counsel and Vice President with Samsung International Inc.

for over 14 years.

Kim holds a B.A.

in Biochemistry and Molecular Biology from the

University of California at Santa Barbara, and a Juris Doctorate from the University of San Diego.

(David) Lee has served

as our Chief Operating Officer since September 2008.

Lee has 23 years of upper level management experience in telecommunications,

including experience in the cellular telephone business in the U.S.

in Biochemistry and Molecular Biology

from the University of California at Santa Barbara, and a Juris Doctorate from the University of San Diego.

Greenstein has served

as a director since February 2025.

He is a Founding Partner of the Pierson Ferdinand LLP law firm.

He previously served as Deputy Assistant

and Strategist to the President during the first Trump Administration.

Before his government service, he was President of IDT Corporation

IDT) and Genie Energy Ltd.

Greenstein holds a Bachelor of Science degree from Cornell University’s School

of Industrial and Labor Relations and a Juris Doctor (JD) from Columbia University School of Law.

He is currently a member of the board

of Forafric Global plc.

AFRI), where he serves on the Audit and Remuneration Committees.

Reid Granados has served as

Acting Chief Financial Officer since January 1, 2025, and as Director of Logistics since September 2024.

Granados has more than twenty

years of experience in finance and operations across multiple industries.

Previously, he served as Vice President of Finance at a publicly

traded retail e-commerce company and, before that, Director of Finance at a NASDAQ-listed company specializing in blockchain payments

processing and stablecoin technology.

He has also served as Chief Financial Officer of a privately held technology and payments company.

Granados holds a Juris Doctor from DePaul University College of Law, an MBA from DePaul University’s Kellstadt Graduate School

of Business, and bachelor’s degrees in accounting and finance from Loyola University Chicago.

Bill Bauer served as our Acting

Chief Financial Officer from October 2022 until January 1, 2025, and has also served as our General Counsel and Director of Strategic

Affairs since October 2022.

He continues to serve as General Counsel and Director of Strategic Affairs.

Prior to joining Franklin, he

served as in-house legal counsel and senior finance executive across various industries in California and Texas.

He has over 15 years

of experience in Finance and executive management.

He holds a Master’s degree in Business Administration from San Diego State University

and a Juris Doctorate from California Western School of Law and is also a member of both the California and Texas State Bars.

(David) Lee served

as our Chief Operating Officer from September 2008 until July 2023.

Since July 2023 Mr.

Lee has served as our Senior Vice President of

Lee has 23 years of executive management experience in telecommunications, including experience in the cellular telephone business

and South America.

Prior to joining the Company, he was President

of Ace Electronics, and served as Chief Financial Officer and Director of Sales and Marketing for RMG Wireless.

Prior to that, he served

as Controller and Director of International Sales for Focus Wireless in Chicago.

Bill Bauer has served as our Acting

Chief Financial Officer since October 2022.

Prior to joining Franklin, he served as in-house legal counsel and senior finance executive

across various industries in California and Texas.

He has over 15 years of experience in Finance and executive management.

Master’s degree in Business Administration from San Diego State University and a Juris Doctorate from California Western School

of Law and is also a member of both the California and Texas State Bars.

Prior to joining the Company, he served as President of Ace Electronics, and as Chief Financial Officer

and Director of Sales and Marketing for RMG Wireless.

Prior to that, he served as Controller and Director of International Sales for Focus

Wireless in Chicago.

CODE OF ETHICS

The Board of Directors has adopted

a Code of Ethics, which is applicable to all of our employees, including our principal executive officer, principal financial officer,

principal accounting officer or controller, or persons performing similar functions.

The Board of Directors has

adopted a Code of Ethics, which is applicable to all of our employees, including our principal executive officer, principal financial

officer, principal accounting officer or controller, or persons performing similar functions.

The Code of Ethics covers all areas of professional

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The Board of Directors has an Audit Committee

made up of Heidy Chow (committee chair), Gary Nelson, and Kristina Kim, and a Compensation Committee made up of Gary Nelson (committee

chair) and Johnathan Chee, and a Nominating Committee made up of Gary Nelson (committee chair) and Johnathan Chee.

The Board of Directors

has no other committees.

made up of Heidy Chow (committee chair), Kristina Kim, and Ira Greenstein;

a Compensation Committee made up of Johnathan Chee (committee

chair) and Kristina Kim;

and a Nominating Committee made up of Johnathan Chee and Heidy Chow.

The Board of Directors has no other committees.

RULE 10B-5-1 TRADING ARRANGEMENTS

During the fiscal year ended

June 30, 2025, none of our directors or executive officers adopted, modified, or terminated any contract, instruction, or written plan

for the purchase or sale of our securities that is intended to satisfy the affirmative defense conditions of Rule 10b5-1 under the Securities

Exchange Act of 1934.

In addition, none of our directors or executive officers adopted, modified, or terminated any non-Rule 10b5-1 trading

arrangement (as defined in Item 408(c) of Regulation S-K) during the fiscal year.

INSIDER TRADING POLICIES AND PROCEDURES

The Company has adopted an

Insider Trading Policy (the “Policy”) that applies to all directors, executive officers, employees, and certain consultants

and contractors.

The Policy is designed to promote compliance with federal securities laws and to prohibit insider trading in the Company’s

The Policy, among other things:

· Prohibits the purchase or sale of the Company’s securities while aware of material nonpublic information .

· Restricts trading during designated blackout periods surrounding the Company’s earnings releases

and other significant events.

· Requires pre-clearance of trades by directors, executive officers, and designated employees.

· Prohibits hedging, short sales, and transactions in derivatives tied to the Company’s securities.

· Restricts the use of margin accounts and pledges of Company securities without advance approval.

The Policy also addresses

the adoption and use of Rule 10b5-1 trading plans, requiring that such plans comply with applicable SEC rules and be pre-approved by the

Company’s compliance officer.

EXECUTIVE COMPENSATION

The following table sets forth

all compensation paid or accrued by us for the years ended June 30, 2024 and 2023 to our President, Chief Operating Officer, and Acting

Chief Financial Officer (The “Named Executive Officers”).

The Board of Directors has adopted

a Policy on Recoupment of Executive Incentive Compensation, effective as of October 13, 2023, pursuant to the requirements of Nasdaq Listing

Rule 5608 and Securities Exchange Act Rule 10D-1.

The Policy sets forth the circumstances under which the Company will recover certain

incentive compensation paid to the Executive Officers of the Company in connection with certain financial restatements.

Each Executive

Officer shall be required to sign and return a form pursuant to which such Executive Officer will agree to be bound by the terms of this

Policy (see “Exhibit 97”).

all compensation paid or accrued by us for the years ended June 30, 2025 and 2024 to our President, Acting Chief Financial Officer, General

Counsel, and Senior Vice President of Sales (The “Named Executive Officers and Officers”).

The Board of Directors has

adopted a Policy on Recoupment of Executive Incentive Compensation, effective as of October 13, 2023, pursuant to the requirements of

Nasdaq Listing Rule 5608 and Securities Exchange Act Rule 10D-1 (the “Policy”).

The Policy sets forth the circumstances under

which the Company will recover certain incentive compensation paid to Executive Officers and other officers of the Company in connection

with certain financial restatements.

Each is required to sign and return a form pursuant to which such Executive Officer or other officer

agrees to be bound by the terms of this Policy.

The Policy is attached to this Report as Exhibit 97.

Summary Compensation Table

Name and Principal Position

Stock Option Repurchase Payment

Option Awards

President, CEO and a Director

$ 500,000 (1)

$ 1,750,000 (1)

$ 746,067 (2)

Reid Granados (3)

Acting Chief Financial Officer (Principal Financial

Officer), and Director of Logistics

William Bauer (4),

Secretary, General Counsel, and Director of Strategic

(David) Lee (5),

Senior Vice President of Sales

David Brown (3),

Acting Chief Financial Officer

(1) On September 23, 2024, the Board acknowledged that Mr.

Kim had earned an incentive bonus of $1,250,000

for negotiating and securing a joint venture agreement with MeiG Smart Technology Co., Ltd.

However, the Company and Mr.

Kim entered into

a Forbearance Agreement, dated September 23, 2024, under which Mr.

Kim agreed to defer payment of the bonus, in exchange for the Company’s

agreement to allow Mr.

Kim to defer payment of the $1,000,000 settlement amount owed by Mr.

Kim to the Company under a Settlement Agreement,

dated June 12, 2024.

The forbearance is to allow Mr.

Kim time to pursue remedies with the State of Nevada (See “Business—Shareholder

Litigation—Short Swing Profits Litigation”).

(1) For fiscal year 2024, a total of $500,000 in quarterly bonuses was accrued (Refer to Exhibit 10.12).

fiscal year 2025, a total of $1,750,000 in bonuses was accrued, consisting of $500,000 in current fiscal year quarterly bonuses and $1,250,000

related to the Joint Venture (Refer to Exhibit 10.13).

For fiscal year 2025, bonus payment of $25,001 was made in December 2024.

(2) Amount shown is not a cash payment.

On May 8, 2025, the Company entered into an Option Repurchase Agreement

Kim under which it agreed to repurchase certain vested options with a nominal value of $746,067.

Of this amount, $408,663 was

withheld to satisfy applicable employee payroll and income tax withholding obligations in accordance with federal and state tax requirements,

and the remaining $337,404, which represented the net amount otherwise payable to Mr.

Kim,, was applied in full to offset his receivable

balance with the Company (Refer to Exhibit 10.15).

No cash was paid directly to Mr.

Kim in connection with this transaction.

(3) On January 1, 2025, the Board of Directors appointed Reid Granados as Acting Chief Financial Officer.

(4) On January 1, 2025, William Bauer resigned his position as Acting Chief Financial Officer but retained

his positions as General Counsel and Director of Strategic Affairs.

The change in title does not affect Mr.

Bauer’s compensation.

(5) On July 14, 2023, the Board of Directors appointed David Lee as Senior Vice President of Sales.

Lee had previously served as Chief

Operating Officer.

had previously served as Chief Operating Officer.

The change in title does not affect Mr.

Lee’s compensation.

(3) David Brown resigned his position on September 30, 2022.

Outstanding Equity Awards at Fiscal Year-End

The following table presents

the outstanding equity awards held by each of the Named Executive Officer as of June 30, 2024.

The options vest over periods of

three years and are subject to early termination on the occurrence of certain events related to termination of employment.

addition, the full vesting of options is accelerated if there is a change in control of the Company.

the outstanding equity awards held by each of the Named Executive Officers and Officers as of June 30, 2025.

The options vest over

periods of three years and are subject to early termination on the occurrence of certain events related to termination of employment.

In addition, the full vesting of options is accelerated if there is a change in control of the Company.

Outstanding Equity Awards at Fiscal Year-End

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Director Compensation

Our directors are reimbursed for

reasonable out-of-pocket expenses incurred in attending meetings of the Board of Directors.

Employee directors do not receive any cash

compensation for service as directors and do not receive any equity compensation designated for such services.

Members of the Board of

Directors who are not employees may receive stock option grants as consideration for their board service from time to time, although there

is no established policy for such stock option grants.

Our directors are reimbursed

for reasonable out-of-pocket expenses incurred in attending meetings of the Board of Directors.

Employee directors do not receive any

cash compensation for service as directors and do not receive any equity compensation designated for such services.

Members of the Board

of Directors who are not employees may receive stock option grants as consideration for their board service from time to time, although

there is no established policy for such stock option grants.

Timing of Stock Option Grants

The Company’s Compensation

Committee has adopted a policy regarding the timing of grants of stock options and other equity awards.

Under this policy:

· Annual equity awards are generally approved shortly after the Company’s fiscal year-end results

are released.

· The Committee does not time grants in coordination with the release of material nonpublic information.

· Directors, officers, and employees are prohibited from receiving options or other equity awards during

blackout periods or at any time when they are aware of material nonpublic information.

· Any Rule 10b5-1 trading plans adopted by executives must comply with applicable SEC regulations and the

Company’s Insider Trading Policy.

During fiscal year 2025, the

Company did not grant any stock options or equity awards.

Fiscal 2025 Director Compensation

1 unchanged sentence

Johnathan Chee

Directors are compensated at a base rate of $20,000 annually for the year ended June 30, 2024.

Bonuses may be awarded when the business has performed exceptionally well as determined by the Board of Directors.

For the year ended June 30, 2024, there has been no approved bonus for the Directors.

There was no outstanding equity awards held by any

of the non-officer directors as of June 30, 2024.

Ira Greenstein

Directors are compensated at a base rate of $20,000

annually for the year ended June 30, 2025.

Bonuses may be awarded when the business has performed exceptionally well as determined by

the Board of Directors.

For the year ended June 30, 2025, bonuses totaling $10,000 have been approved and a total of $542 has been reimbursed

for directors’ business expenses.

On June 24, 2025, the Board of Directors approved a $10,000 increase to the Chairman's annual

compensation.

This decision brings the Chairman's annual salary to $30,000, with the new rate becoming effective at the start of fiscal

On February 17, 2025, the Board of Directors appointed

Ira Greenstein to the Board of Directors to replace Gary Nelson who resigned his position on the Board, and Mr.

Nelson was not compensated

for the quarter ended June 30, 2025.

There are no outstanding equity awards held by

any of the non-officer directors as of June 30, 2025.

EMPLOYMENT CONTRACTS

1 unchanged sentence

into Change of Control Agreements with OC Kim, our President, and Yun J.

(David) Lee, our Senior Vice President of Sales and previously

(David) Lee, our Senior Vice President of Sales who previously

served as Chief Operating Officer.

11 unchanged sentences

On November 10, 2022, the

Company and OC Kim, its President, entered into an amendment of the employment letter agreement dated September 7, 2021.

The amendment

provides for a severance payment of $3 million if Mr.

Kim voluntarily terminates his employment by the Company or if he voluntarily terminates

Company and OC Kim, its President, entered into an amendment of the employment agreement dated September 7, 2021.

The amendment provides

for a severance payment of $3 million if Mr.

Kim voluntarily terminates his employment with the Company or if he voluntarily terminates

his employment due to a “change in circumstances,” generally defined as a material breach by the Company of its salary and

14 unchanged sentences

letter, with the first such bonus due on December 31, 2022.

For the year ended June 30, 2024 and 2023, $500,000 and $375,000 bonus had

been accrued, respectively, with $875,000 and $375,000 accrual bonus balances as of June 30, 2024 and 2023, respectively.

Incentive bonuses of $500,000 have been accrued for each of the years ended

June 30, 2025 and 2024, resulting in accrued bonus balances of $1,375,000 and $875,000 as of June 30, 2025 and 2024, respectively.

of June 30, 2025, no payment for the accrued bonuses has been made by the Company.

The employment agreement with

OC Kim was renewed and extended by the Board in September 2024 and will continue through October 2027.

FORBEARANCE AGREEMENT

On September 23, 2024, the

Board acknowledged that OC Kim, its President, had earned an incentive bonus of $1,250,000 for negotiating and securing a joint venture

agreement with its EMS partner.

The Company and Mr.

Kim also entered into a Forbearance Agreement on September 23, 2024, under which Mr.

Kim agreed to defer the bonus, in exchange for the Company’s agreement to allow Mr.

Kim to defer payment of the $1,000,000 settlement

amount owed by Mr.

Kim to the Company under a Settlement Agreement, dated June 12, 2024.

On January 16, 2025, we accrued

the deferred incentive bonus of $1,250,000 to OC Kim, our President, and recognized a receivable for the deferred $1,000,000 settlement

amount owed by Mr.

Kim to the Company.

As of June 30, 2025, no payment for the accrued bonus has been made to Mr.

Kim by the Company,

and the receivable of $1,000,000 from Mr.

Kim was partially settled through the May 8, 2025 option repurchase transaction, in which the

$337,404 net proceeds otherwise payable to Mr.

Kim were applied against the receivable.

This leaves a remaining settlement balance of

$662,596 owed by Mr.

Kim as of June 30, 2025.

COMPENSATION DISCUSSION AND ANALYSIS

GENERAL PHILOSOPHY - We

compensate our executive officers through a mix of base salary, incentive compensation and stock options.

Our compensation policies are

designed to be competitive with comparable employers and to align management’s incentives with both near-term and long-term interests

of our stockholders.

We use informal methods of benchmarking our executive compensation, based on the experience of our directors or,

in some cases, studies of industry standards.

Our compensation is negotiated on a case by case basis, with attention being given to the

amount of compensation necessary to make a competitive offer and the relative compensation among our executive officers.

BASE SALARIES – We

want to provide our senior management with a level of cash compensation in the form of base salary that facilitates an appropriate lifestyle

given their professional status and accomplishments.

GENERAL PHILOSOPHY -

We compensate our executive officers through a mix of base salary, incentive compensation and stock options.

Our compensation policies

are designed to be competitive with comparable employers and to align management’s incentives with both near-term and long-term

interests of our stockholders.

We use informal methods of benchmarking our executive compensation, based on the experience of our directors

or, in some cases, studies of industry standards.

Our compensation is negotiated on a case by case basis, with attention being given to

the amount of compensation necessary to make a competitive offer and the relative compensation among our executive officers.

BASE SALARIES –

We want to provide our senior management with a level of cash compensation in the form of base salary that facilitates an appropriate

lifestyle given their professional status and accomplishments.

INCENTIVE COMPENSATION

7 unchanged sentences

– We are generally an “at-will” employer and have no employment agreements with severance benefits;

however, we have entered

into Change of Control Agreements with OC Kim & David Lee, and a severance agreement with OC Kim that provides him with a lump

sum payment in the event he leaves the Company.

however, we have

entered into Change of Control Agreements with OC Kim & David Lee, and a severance agreement with OC Kim that provides him with

a lump sum payment in the event he leaves the Company.

RETIREMENT PLANS –

2 unchanged sentences

MANDATORY RECOUPMENT POLICY

– The Company maintains a Mandatory Recoupment Policy to enable the Company to recover erroneously awarded compensation in the event

that the Company is required to prepare an accounting restatement.

– The Company maintains a Mandatory Recoupment Policy to enable the Company to recover erroneously awarded compensation in

the event that the Company is required to prepare an accounting restatement.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL

9 unchanged sentences

Joon Won Jyoung

9707 Waples Street, Suite 150, San Diego, CA 92121

3940 Ruffin Road, Suite C, San Diego, CA 92123

The Estate of Gary Nelson

3940 Ruffin Road, Suite C, San Diego, CA 92123

Johnathan Chee

9707 Waples Street, Suite 150, San Diego, CA 92121

805 Third Ave., 15 th Floor, New York, NY 10022

3940 Ruffin Road, Suite C, San Diego, CA 92123

7100 West Camino Real, Suite 302-48, Boca Raton, FL 33433

All directors and executive officers as a group

Based solely on a Schedule 13G dated December 31, 2023, which indicates that Mr.

Gary Nelson resigned from the Board of directors on February 17, 2025, and passed away on June 11, 2025.

Based solely on a Schedule 13G dated March 31, 2025, which indicates that Mr.

Packer may be deemed to beneficially own 727,794 shares.

4 unchanged sentences

INDEPENDENCE.

We entered into a Forbearance

Agreement with Mr.

Kim on September 23, 2024, under which Mr.

Kim agreed to defer a $1,250,000 bonus previously earned by him in exchange

for the Company’s agreement to allow Mr.

Kim to defer payment of the $1,000,000 settlement amount owed by Mr.

Kim to the Company

under a Settlement Agreement, dated June 12, 2024.

On January 16, 2025, we accrued

the deferred incentive bonus of $1,250,000 to OC Kim, our President, and recognized a receivable for the deferred $1,000,000 settlement

amount owed by Mr.

Kim to the Company.

As of June 30, 2025, no payment for the accrued bonus has been made to Mr.

Kim by the Company and

the receivable of $1,000,000 from Mr.

Kim was partially settled through the May 8, 2025 option repurchase transaction, in which the $337,404

net proceeds otherwise payable to Mr.

Kim were applied against the receivable.

This leaves a remaining settlement balance of $662,596

Kim as of June 30, 2025.

On May 8, 2025, we entered

into an Option Repurchase Agreement with Mr.

Kim under which we repurchased certain vested options for a total value of $746,067.

amount, $408,663 was withheld to satisfy applicable payroll and income tax obligations, and the remaining $337,404, which represented

the net amount otherwise payable to Mr.

Kim, was applied in full to offset his receivable balance with the Company.

No cash was paid directly

Kim in connection with this transaction.

For the years ended June 30,

2025 and 2024, we purchased electronic manufacturing services from Forge International Co., Ltd., our joint venture partner in the organization

of Sigbeat, in the amounts of approximately $13.7 million and $177,000, respectively, and had related accounts payable of approximately

$5.6 million and $177,000 as of June 30, 2025 and 2024, respectively.

(Refer to NOTE 9–RELATED PARTY TRANSACTIONS)

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The aggregate fees billed for

the most recently completed fiscal period for the audit of our annual financial statements and services normally provided by the independent

The aggregate fees billed

for the most recently completed fiscal period for the audit of our annual financial statements and services normally provided by the independent

registered public accounting firm for this fiscal period were as follows:

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The fees set forth on the foregoing table relate to the audit as of and for the years ended June 30, 2025, and 2024, which

was performed by Simon & Edward, LLP and Kreit and Chiu CPA LLP (formerly as “Paris, Kreit, and Chiu CPA LLP”), respectively.

All of the services described above were approved in advance by the Board of Directors or the Company’s Audit Committee.

was performed by Simon & Edward, LLP.

All of the services described above were approved in advance by the Board of Directors or the

Company's Audit Committee.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

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Articles of Merger and Agreement and Plan of Reorganization, filed January 2, 2008 with the Nevada Secretary of State (1)

of Incorporation of Franklin Wireless Corp.

and Restated Bylaws of Franklin Wireless Corp.

of Securities (6)

Employment Agreement, dated September 7, 2021, between Franklin Wireless Corp.

Articles of Incorporation of Franklin Wireless Corp.

Amended and Restated Bylaws of Franklin Wireless Corp.

Description of Securities (6)

Agreement, dated September 7, 2021, between Franklin Wireless Corp.

Amendment No.

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and OC KIM (8)

of Control Agreement, dated October 1, 2021, between Franklin Wireless Corp.

Change of Control Agreement, dated October 1, 2021, between Franklin Wireless Corp.

and OC Kim (4)

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(“David”) Lee (4)

dated September 9, 2015, between the Company and Hunsaker & Associates San Diego, Inc., a California corporation (5)

Agreement between Franklin Technology Incorporation and Franklin Wireless Corp., dated March 31, 2022 (7)

Lease, dated September 9, 2015, between the Company and Hunsaker & Associates San Diego, Inc., a California corporation (5)

Loan Agreement between Franklin Technology Incorporation and Franklin Wireless Corp., dated March 31, 2022 (7)

Amendment No.

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2 to Change of Control Agreement, dated September 11, 2024, between Franklin Wireless Corp.

and OC Kim (11)

Amendment No.

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2 to Employment Agreement, dated September 11, 2024, between Franklin Wireless Corp.

and OC Kim (11)

Forbearance Agreement, dated September 23, 2024, between Franklin Wireless Corp.

and OC Kim (11)

Purchase and Supply Agreement Partially Redacted, dated June 20, 2024, between Franklin Wireless Corp.

and Forge International Co., Ltd (10)

Repurchase Agreement, dated May 8, 2025, between Franklin Wireless Corp.

and OC Kim (10)

of Ethics (2)

Consent of Kreit and Chiu CPA LLP

Consent of Simon & Edward LLP

Insider Trading Policy

Certificate of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

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XBRL Presentation Linkbase Document

(1) Incorporated by reference from Report

on Form 10-QSB for the quarterly period ended March 31, 2008, filed on May 14, 2008.

(2) Incorporated by reference from Annual

Report on Form 10-K for the year ended June 30, 2008, filed on September 26.

(3) Incorporated by reference from Annual

Report on Form 10-K for the year ended June 30, 2009, filed on October 13, 2009.

(4) Incorporated by reference from

Report on Form 8-K dated October 1, 2021.

(5) Incorporated by reference from Quarterly

Report on Form 10-Q for the quarter ended September 30, 2015, filed on November 16, 2015.

(6) Incorporated by reference from Report

on Form 10-K/A for the year ended June 30, 2020, filed on September 18, 2020.

(7) Incorporated by reference from Quarterly

Report on Form 10-Q for the quarter ended March 31, 2022, filed on May 10, 2022.

(8) Incorporated by reference from Quarterly

Report on Form 10-Q for the quarter ended December 31, 2022, filed on February 14, 2023.

(9) Incorporated by reference from Annual Report

on Form 10-K for the year ended June 30, 2023, filed on September 28, 2023.

(1) Incorporated by reference from Report on Form 10-QSB for the quarterly period ended March 31, 2008, filed on May 14, 2008.

(2) Incorporated by reference from Annual Report on Form 10-K for the year ended June 30, 2008, filed on September 26.

(3) Incorporated by reference from Annual Report on Form 10-K for the year ended June 30, 2009, filed on October 13, 2009.

(4) Incorporated by reference from Report on Form 8-K dated October 1, 2021

(5) Incorporated by reference from Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, filed on November 16, 2015.

(6) Incorporated by reference from Report on Form 10-K/A for the year ended June 30, 2020, filed on September 18, 2020.

(7) Incorporated by reference from Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, filed on May 10, 2022.

(8) Incorporated by reference from Quarterly Report on Form 10-Q for the quarter ended December 31, 2022, filed on February 14, 2023.

(9) Incorporated by reference from Annual Report on Form 10-K for the year ended June 30, 2023, filed on September 28, 2023.

(10) Incorporated by reference from Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, filed on May 15, 2025.

(11) Incorporated by reference from Annual Report on Form 10-K for the year ended June 30, 2024, filed on September 30, 2024.

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Not applicable.

In accordance with Section 13 of 15(d) of the Exchange

Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

In accordance with Section 13 of 15(d) of the

Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Franklin Wireless Corp.

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September 29, 2025

Pursuant to the requirements of the Securities Exchange

Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates

Pursuant to the requirements of the Securities

Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and

on the dates indicated.

Principal Executive Officer

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September 29, 2025

Principal Financial Officer

/s/ BILL BAUER

Principal Financial and Accounting Officer

/s/ REID GRANADOS

Acting Chief Financial Officer

September 29, 2025

/s/ GARY NELSON

Chairman of the Board of Directors

September 30, 2024

Reid Granados

/s/ JOHNATHAN CHEE

Chairman of the Board and a Director

September 29, 2025

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September 29, 2025

/s/ IRA GREENSTEIN

September 29, 2025

Ira Greenstein

FRANKLIN WIRELESS CORP.

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Report of Independent Registered Public Accounting Firm (PCAOB ID# 2485 )

Report of Independent Registered Public Accounting Firm (PCAOB ID 6651 )

Consolidated Balance Sheets as of June 30, 2025 and 2024

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We have audited the accompanying

consolidated balance sheet of Franklin Wireless Corp.

and its subsidiary (the “Company”) as of June 30, 2024, the related

consolidated statements of operations and comprehensive income, changes in stockholders’ equity, and cash flows for the year then ended,

and the related notes (collectively referred to as the “consolidated financial statements”).

consolidated balance sheets of Franklin Wireless Corp.

and its subsidiary (the “Company”) as of June 30, 2025 and 2024, the

related consolidated statements of operations and comprehensive loss, changes in stockholders' equity, and cash flows for the years then

ended, and the related notes (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated

financial statements present fairly, in all material respects, the financial position of the Company at June 30, 2024, and the results

of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United

States of America.

financial statements present fairly, in all material respects, the financial position of the Company at June 30, 2025 and 2024, and the

results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in

the United States of America.

Basis for Opinion

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Accordingly, we express no such opinion.

Our audit included performing procedures to

assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures

Our audit included performing procedures to assess

the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

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Critical Audit Matter

Critical audit matters are matters arising

from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit

committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved

our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our

opinion on the consolidated financial statements taken as a whole, and we are not, by communicating the critical audit matters below,

providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Critical audit matters are matters arising from

the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially

challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the

consolidated financial statements taken as a whole, and we are not, by communicating the critical audit matters below, providing separate

opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Legal Proceedings

As described in Note 6, the Company has been

involved in multiple legal proceedings and claims arising in the ordinary course of business, including shareholder litigation and short-swing

As described in Note 6, the Company has been involved

in multiple legal proceedings and claims arising in the ordinary course of business, including shareholder litigation and short-swing

profit litigation.

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this critical audit matter included:

· Reviewed all ongoing legal claims and supporting

documents, including assessing the status of each case, the likely outcome, and potential financial exposure.

· Reviewed all ongoing legal claims and settled

claims along with the supporting documents, including assessing the status of each case, the likely outcome, and potential financial exposure.

· Obtained the legal confirmations per our audit

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legal contingencies to determine if they accurately reflect potential liabilities.

· Verified the gain from legal compensation recorded

with the settlement agreement entered and payment received.

· Ensured that the Company’s disclosures

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September 29, 2025

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Board of Directors and Shareholders of Franklin Wireless Corp.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance

sheets of Franklin Wireless Corp.

and its subsidiary (the “Company”) as of June 30, 2023, and 2022, and the related consolidated

statements of comprehensive (loss) income, changes in stockholders’ equity, and cash flows for each of the two years in the period

ended June 30, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements

present fairly, in all material respects, the financial position of the Company as of June 30, 2023, and 2022 and the results of its operations

and its cash flows for each of the two years in the period ended June 30, 2023, in conformity with accounting principles generally accepted

in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility

of the entity’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated

financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we

engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding

of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s

internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess

the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the

consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide

a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a

matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated

to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and

(2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matter does not alter in

any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter

below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate .

Description of the Matter

Legal Proceedings

As described in Note 6 to the consolidated financial

statements, management records liabilities for legal proceedings in those instances where it can reasonably estimate the amount of the

loss and when loss is probable.

Where the reasonable estimate of the probable loss is a range, management records as an accrual in its

consolidated financial statements the most likely estimate of the loss, or the low end of the range if there is no one best estimate.

Management either discloses the amount of a possible loss or range of loss in excess of established accruals if estimable, or states that

such an estimate cannot be made.

Management discloses significant legal proceedings even where liability is not probable or the amount

of the liability is not estimable, or both, if management believes there is at least a reasonable possibility that a loss may be incurred.

How We Addressed the Matter in Our Audit

The principal considerations for our determination

that performing procedures relating to legal proceedings is a critical audit matter are the significant judgment by management when assessing

the likelihood of a loss being incurred and when estimating the loss or range of loss for each claim, which in turn led to significant

auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s assessment of the liabilities and

disclosures associated with legal proceedings.

Addressing the matter involved performing procedures

and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures

included determining the likelihood of a loss and whether the amount of loss can be reasonably estimated, as well as evaluating disclosures

citing the compliance with the financial reporting framework.

These procedures also included, among others, obtaining and evaluating the

letters of audit inquiry with internal and external legal counsel, evaluating the reasonableness of management’s assessment regarding

whether an unfavorable outcome is reasonably possible or probable and reasonably estimable, and evaluating the sufficiency of the Company’s

disclosures related to legal proceedings and accounting in the consolidated financial statements.

We have served as the Company’s auditors since

/s/ Kreit and Chiu CPA LLP (formerly as “ Paris,

Kreit and Chiu CPA LLP ”).

September 28, 2023

FRANKLIN WIRELESS CORP.

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Accounts receivable, net

Other receivable due from officer

Inventories, net

Other current assets

Loan to an employee

Advance payments to vendors

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Contract liabilities and advance from customers

Accrued legal contingency expense

Accrued liabilities

Accrued liabilities, bonus payable to an officer

Accrued liabilities, others

Lease liabilities, current

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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

The accompanying notes are an integral part of these

audited consolidated financial statements.

The accompanying notes are an integral part of

these audited consolidated financial statements.

FRANKLIN WIRELESS CORP.

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Gain from the forgiveness of accounts payable and accrued liabilities

Loss from the disposal of property and equipment and intangible assets

Loss from a legal contingency

( 2,400,000 )

Loss from foreign currency transactions

Gain (loss) from the disposal of property and equipment and intangible assets

Litigation settlement income

Gain (loss) from foreign currency transactions

Other income, net

Total other income (expense), net

( 1,481,743 )

Loss before benefit for income taxes

( 5,115,971 )

( 3,831,318 )

Income tax benefit

( 4,166,671 )

( 2,944,659 )

non-controlling interests in net loss of subsidiary at 33.7%

non-controlling interests in net income (loss) of subsidiary at 33.7%

non-controlling interests in net income (loss) of subsidiary at 40.0%

Net loss attributable to Parent Company

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( 4,333,934 )

( 3,032,437 )

comprehensive loss attributable to non-controlling interest

comprehensive income (loss) attributable to non-controlling interest

Foreign exchange translation attributable to non-controlling interest

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$ ( 4,074,911 )

The accompanying notes are an integral part of these

audited consolidated financial statements.

The accompanying notes are an integral part of

these audited consolidated financial statements.

FRANKLIN WIRELESS CORP.

Consolidated Statements of Changes in Stockholders'

Other Comprehensive

Additional Paid-in

Accumulated Other Comprehensive

Total Stockholders

Balance - June 30, 2023

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( 3,964,016 )

Foreign exchange translation attributable to Parent Company

Issuance of stock related to stock option exercised

Foreign exchange translation

Comprehensive loss attributable to non-controlling interest

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Net loss attributable to Parent Company

( 3,964,016 )

Foreign exchange translation attributable to Parent Company

Foreign exchange translation attributable to non-controlling interest

Comprehensive loss attributable to non-controlling interest

Foreign exchange translation

Comprehensive income attributable to non-controlling interest

Stock based compensation

Company stock option repurchase from an officer

Contribution to a subsidiary by an EMS Partner

Balance - June 30, 2025

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$ ( 1,146,862 )

The accompanying notes are an integral part of these

audited consolidated financial statements.

The accompanying notes are an integral part of

these audited consolidated financial statements.

FRANKLIN WIRELESS CORP.

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Amortization of intangible assets

Loss from foreign currency transactions

(Gain) loss from foreign currency transactions

Stock based compensation

Write-down of inventories

Loss from the disposal of property and equipment and intangible assets

Forgiveness of debts

Amortization of right of use assets

Bad debt expense

Reserve for allowance slow moving inventories

(Gain) from trading vehicle and loss from the disposal of property and equipment and intangible assets

Recovery of litigation settlement with an officer

( 1,000,000 )

Forgiveness of debts

Net change of right use assets and lease liabilities

Deferred tax benefit

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Accounts receivable

( 7,627,183 )

Other current assets

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Accrued liabilities

Lease liabilities

Net cash used in operating activities

( 1,882,114 )

Net cash provided by (used in) operating activities

CASH FLOW FROM INVESTING ACTIVITIES:

Contribution to a subsidiary by an EMS partner

Proceeds (purchases) of short-term investments

( 10,391,654 )

Purchases of property and equipment

Payments for capitalized product development costs

( 1,631,376 )

Purchases of intangible assets

Net cash provided by (used in) investing activities

( 12,109,183 )

Cash proceeds from sales of a vehicle

Payments for capitalized product development costs and intangible assets

Net cash provided by investing activities

CASH FLOW FROM FINANCING ACTIVITIES:

Loan to an employee

Repayment received from the employee loan

Cash received from exercise of stock options

Net cash provided by financing activities

Payment to repurchase stock option from an officer

Net cash (used in) provided by financing activities

Effect of foreign currency translation

Net increase (decrease) in cash and cash equivalents

( 14,036,132 )

Net increase in cash and cash equivalents

Cash and cash equivalents, beginning of year

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Cash paid during the periods for:

The accompanying notes are an integral part of these

audited consolidated financial statements.

Noncash supplemental disclosure of cash flow information:

Accrued liabilities offset with other receivable from an officer:

$ ( 337,404 )

The accompanying notes are an integral part of

these audited consolidated financial statements.

FRANKLIN WIRELESS CORP.

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NOTE 1 - BUSINESS OVERVIEW

Doing business

as “FranklinAccess”, we are a leading global provider of integrated wireless solutions utilizing the latest 5G (fifth generation)

and 4G LTE (fourth generation long-term evolution) technologies including mobile hotspots, fixed wireless routers, and mobile device management

(MDM) solutions.

We are a leading enabler of the Digital Divide initiative, and our expertise extends to innovation in Internet of Things

(IOT) and machine-to-machine (M2M) applications, driving forward seamless communication and connectivity for both individuals and enterprises.

We hold 66.3% ownership

of Franklin Technology Inc.

(FTI) since the date of acquisition, October 1, 2009, a research and development company based in Seoul, South

FTI primarily provides design and development services for our wireless products.

Our products are generally marketed and sold

directly to wireless operators and indirectly through strategic partners and distributors.

Our primary markets are in North America and

Doing business as “Franklin

Access”, we are a leading global provider of integrated wireless solutions utilizing the latest 5G (fifth generation) and 4G LTE

(fourth generation long-term evolution) technologies including mobile hotspots, fixed wireless routers, and mobile device management (MDM)

We are a leading enabler of the Digital Divide initiative, and our expertise extends to innovation in Internet of Things (IOT)

and machine-to-machine (M2M) applications, driving forward seamless communication and connectivity for both individuals and enterprises.

We hold a 66.3% ownership

in Franklin Technology Inc.

(“FTI”), a research and development company based in Seoul, South Korea.

FTI primarily provides

design and development services for our wireless products.

We hold a 60% ownership interest in Sigbeat Inc., based in San Diego, California

(“Sigbeat”), which will engage in worldwide sales, marketing, customer support and operations for telecommunications modules.

Our products are generally

marketed and sold directly to wireless operators and indirectly through strategic partners and distributors.

Our primary markets are in

North America and Asia.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of significant accounting policies of the Company is presented to assist in understanding the Company’s consolidated financial statements.

The consolidated financial statements and notes are representations of the Company’s management, which is responsible for their

integrity and objectivity.

These accounting policies conform to GAAP and have been consistently applied in the preparation of the consolidated

financial statements.

This summary of significant

accounting policies of the Company is presented to assist in understanding the Company’s consolidated financial statements.

consolidated financial statements and notes are representations of the Company’s management, which is responsible for their integrity

and objectivity.

These accounting policies conform to GAAP and have been consistently applied in the preparation of the consolidated financial

Principles of Consolidation

The consolidated financial statements

include the accounts of the Company and its subsidiary with a majority voting interest of approximately 66.3 % (approximately 33.7 % is

owned by non-controlling interests) as of June 30, 2024, and 2023.

In the preparation of consolidated financial statements of the Company,

intercompany transactions and balances are eliminated and net earnings are reduced by the portion of the net earnings of the subsidiary

applicable to non-controlling interests.

As of June 30, 2025, the

consolidated financial statements include the accounts of the Company and its subsidiaries, Franklin Technology Inc.

and Sigbeat Inc.

(“Sigbeat”), with majority voting interests of approximately 66.3 % and 60 .0%, respectively, (approximately

33.7 % and 40.0 % are owned by noncontrolling interests, respectively).

As of June 30, 2024, the consolidated financial statements include

the accounts of the Company and its subsidiary, FTI, with a majority voting interest of 66.3 % (approximately 33.7 % is owned by noncontrolling

In the preparation of consolidated financial statements of the Company, intercompany transactions and balances are eliminated

and net earnings (loss) are reduced by the portion of the net earnings (loss) of the subsidiary or subsidiaries applicable to noncontrolling

On May 14, 2024, the Company

entered into an Agreement for Formation of a Joint Venture Corporation (the “Agreement”).

Under the terms of the Agreement,

the parties formed a Nevada corporation, Sigbeat, to be owned 60 % by Franklin and 40% by its Electronic Manufacturing Services (“EMS”)

partner, Forge International Co., Ltd.

The parties shall contribute a total of $ 5,000,000 in capital, in accordance

with their respective ownership interest percentages.

Under the terms of the Agreement, Sigbeat has a Board of Directors consisting of

three members, of whom two are to be appointed by the Company and one appointed by Forge.

Sigbeat will engage in worldwide sales, marketing,

customer support and operations for telecommunications modules under such brands or designations as the Board of Directors of Sigbeat

Pursuant to the Agreement,

in July 2024, Sigbeat entered into a stock subscription agreement with Forge to purchase 400,000 shares of Common Stock, representing

40% of the total outstanding Common Stock of Sigbeat.

On December 23, 2024, and January 9, 2025, the Company contributed $ 600,000 and

$ 2,400,000 for Common Stock, respectively, and, on January 16, 2025, Forge contributed $ 2,000,000 for Common Stock.

Reclassifications

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on total stockholders’ equity.

Non-controlling Interest in a Consolidated Subsidiary

Noncontrolling interests

represent approximately 33.7 % equity interests in FTI held by minority shareholders as of the reporting dates.

Non-controlling Interest in Consolidated Subsidiary

As of June 30, 2025, the

non-controlling interest was $ 1,228,944 , which represents a $ 259,023 decrease from $ 1,487,967 as of June 30, 2023.

of $ 259,023 in the non-controlling interest consists of $ 202,655 from loss in the subsidiary of $ 602,110 and $ 56,368 from foreign exchange

translation incurred for the year ended June 30, 2024.

non-controlling interest was $ 3,349,861 , which represents a $ 2,120,917 increase from $ 1,228,944 as of June 30, 2024.

The increase of $ 2,120,917

in the non-controlling interest consists of a $ 97,315 increase in FTI and a $ 2,023,602 increase in Sigbeat.

The $97,315 increase in FTI

reflects $79,070 attributable to non-controlling interest from net income of $234,927 and $18,245 from foreign currency translation adjustments

for the year ended June 30, 2025.

The $2,023,602 increase in Sigbeat reflects $23,602 attributable to non-controlling interest from net

income of $59,005 for the year ended June 30, 2025, and $2,000,000 from Forge’s cash contribution in exchange for Common Stock.

Segment Reporting

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of wireless access products.

We shall generate revenues from

three geographic areas, consisting of North America and Asia.

The Chief Operating Decision Maker (“CODM”) assesses performance for the segment and allocates

resources based on the consolidated net income (loss) of the company.

The CODM uses the consolidated net income (loss) to evaluate the

return on assets in deciding on resource allocation, monitor performance against budgets, and benchmark performance against competitors.

We generate revenues from

two geographic areas, consisting of North America and Asia.

The following enterprise-wide disclosure is prepared on a basis consistent

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The following table contains certain financial information by geographic

area and the reconciliation of total segment sales less disclosed significant expenses to the segment's measure of net income or loss.

Schedule of financial information by geographic

1 unchanged sentence

North America

Schedule of consolidated financial statements

Fiscal Years Ended June 30,

Cost of goods sold

( 38,171,832 )

( 27,288,340 )

Selling, general, and administrative expenses

( 6,676,078 )

( 6,041,355 )

Research and development expenses

( 4,102,660 )

( 3,406,750 )

Other segment items

$ ( 140,429 )

$ ( 4,166,671 )

Schedule of long-lived assets, net

Fiscal Years Ended June 30,

Long-lived assets, net (property and equipment and intangible assets):

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are as follows:

· Level 1 – Observable inputs, such as unadjusted quoted prices in active markets for identical

assets or liabilities accessible to the reporting entity at the measurement date.

· Level 2 – Observable inputs other than Level 1 quoted prices, such as quoted prices for similar

assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable

market data for substantially the full term of the assets or liabilities.

· Level 3 – Unobservable inputs that cannot be directly corroborated by observable market data

and that typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

· Level 1 – Observable inputs, such as unadjusted quoted prices in

active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

· Level 2 – Observable inputs other than Level 1 quoted prices,

such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are

observable or can be corroborated by observable market data for substantially the full term of the assets or

· Level 3 – Unobservable inputs that

cannot be directly corroborated by observable market data and that typically reflect management’s estimate of assumptions that

market participants would use in pricing the asset or liability.

The carrying amounts of financial

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Allowance for Doubtful Accounts

On July 1, 2023, we adopted ASU

2016-13 Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments, which replaces the incurred

loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology.

The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including

loan receivables and held to maturity debt securities.

It also applies to Off-Balance Sheet (“OBS”) credit exposures not accounted

for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments

and leases recognized by a lessor in accordance with Topic 842 on leases.

Upon adoption of ASC 326 and based upon our review of our collection

history as well as the current balances associated with all significant customers and associated invoices, as of June 30, 2024, and 2023,

we did no t record any reserve for unfunded commitments and doubtful accounts.

On July 1, 2023, we adopted

ASU 2016-13 Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments, which replaces the

incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”)

The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized

cost, including loan receivables and held to maturity debt securities.

It also applies to Off-Balance Sheet (“OBS”) credit

exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments)

and net investments and leases recognized by a lessor in accordance with Topic 842 on leases.

Upon adoption of ASC 326 and based upon

our review of our collection history as well as the current balances associated with all significant customers and associated invoices,

as of June 30, 2025, and 2024, we recorded a reserve for doubtful accounts of $ 159,166 and $ 748 , respectively

Cash Flows Reporting

We follow ASC 230, Statements

of Cash Flows, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing,

or financing activities and provides definitions of each category.

We use the indirect or reconciliation method (“Indirect method”)

as defined by ASC 230, Statement of Cash Flows, to report net cash flow from operating activities by adjusting net income to reconcile

it to net cash flow from operating activities by removing the effects of all deferrals of past operating cash receipts and payments and

all accruals of expected future operating cash receipts and payments and all items that are included in net (loss) income that do not

affect operating cash receipts and payments.

of Cash Flows, which requires that cash receipts and payments be classified as operating, investing, or financing activities and provides

definitions for each category.

We use the indirect or reconciliation method (“Indirect method”) as defined by ASC 230.

this method, net income is adjusted for the effects of non-cash transactions, deferrals or accruals of past or future operating cash receipts

and payments, and items classified as investing or financing cash flows.

Related Parties

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our management and policies of the Company.

(Refer to NOTE 11–RELATED PARTY TRANSACTIONS)

(Refer to NOTE 9–RELATED PARTY TRANSACTONS)

Foreign Currency Translations

We have a majority-owned

subsidiary in foreign country, South Korea.

Fluctuations in foreign currency impact the amount of total assets, liabilities, earnings

and cash flows that we report for our foreign subsidiary upon the translation of these amounts into U.S.

Dollars for, and as of the end

of, each reporting period.

We have a majority-owned subsidiary

in a foreign country, South Korea.

Fluctuations in foreign currency impact the amount of total assets, liabilities, earnings and cash

flows that we report for our foreign subsidiary upon the translation of these amounts into U.S.

Dollars for, and as of the end of, each

reporting period.

In particular, the strengthening of the U.S.

Dollar generally will reduce the reported amount of our foreign-denominated

cash, cash equivalents, total revenues and total expense that we translate into U.S.

cash, cash equivalents, total revenues and total expenses that we translate into U.S.

Dollars and report in our consolidated financial

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and therefore, our revenue is not directly subject to foreign currency risk.

accordance with ASC 830, when an operation has transactions denominated in a currency other than its functional currency, they are measured

in the functional currency.

Changes in the expected functional currency cash flows caused by changes in exchange rates are included in

net income (loss) for the period.

accordance with ASC 830, transactions denominated in a currency other than an entity’s functional currency are remeasured into the

functional currency.

Resulting foreign currency transaction gains and losses are recognized in net income (loss) in the period in which

In accordance with ASC 842,

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or finance lease.

Operating leases are recorded in the balance sheet as right-of-use assets (“ROU assets”) and operating lease

Operating leases are recorded in the balance sheet as right-of-use asset (“ROU asset”) and operating lease

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent

our obligation to make lease payment arising from the lease ROU assets and operating lease liabilities are recognized at the commencement

date of the lease and measure based on the present value of lease payment over the lease term.

The ROU assets also includes deferred rent

Our lease arrangement generally does not provide an implicit interest rate.

date of the lease and measured based on the present value of lease payment over the lease term.

The ROU asset also includes deferred rent

Our lease arrangements generally do not provide an implicit interest rate.

As a result, in such situations, we use its incremental

borrowing rate based on the information available at commencement date in determining the present value of lease payments.

borrowing rate based on the information available at the commencement date in determining the present value of lease payments.

options to extend or terminate the lease when it is reasonably certain that it will exercise that option in the measurement of its ROU

assets and liabilities.

assts and liabilities.

Lease expense for operating

lease is recognized on a straight-line basis over the lease term.

leases is recognized on a straight-line basis over the lease term.

We are also electing not to apply the recognition requirements to short-term

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Revenue Recognition

The Company accounts for its revenue

according to ASC 606, “Revenue from Contracts with Customers”, pursuant to which, revenue is recognized when the control of

the promised goods or services is transferred to the customers, and the performance obligations under the contract have been satisfied,

in an amount that reflects the consideration expected to be entitled to in exchange for those goods or services.

The Company determines revenue

recognition through the following steps:

(1) identify the contract(s) with a customer, (2) identify the performance obligations

in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the

contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation.

The Company accounts for its

revenue according to ASC 606, “Revenue from Contracts with Customers”, pursuant to which, revenue is recognized when the control

of the promised goods or services is transferred to the customers, and the performance obligations under the contract have been satisfied,

in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

The Company determines

revenue recognition through the following steps:

(1) identify the contract(s) with a customer, (2) identify the

performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the

performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance

Contracts with Customers

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We establish a provision for estimated warranty and returns.

Using historical averages, that provisions for the years ended

Using historical averages, provisions for the years ended

June 30, 2025, and 2024, were not material.

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Contract Balances

We perform our obligations under

a contract with a customer by transferring products in exchange for consideration from the customer.

We perform our obligations

under a contract with a customer by transferring products in exchange for consideration from the customer.

We typically invoice our customers

as soon as control of an asset is transferred, and a receivable is established.

We, however, recognize contract liability when a customer

prepays for goods and/or services, or we have not delivered goods under the contract since we have not yet transferred control of the

goods and/or services.

The balances of our trade receivables are as follows:

However, we recognize contract liability when a customer

prepays for goods and/or services, or when we have not delivered goods under the contract since we have not yet transferred control of

the goods and/or services.

The balances of our trade

receivables are as follows:

Schedule of trade receivables

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Accounts Receivable, net

The balance of contract assets

was immaterial as we did not have a significant amount of un-invoiced receivables in the periods ended June 30, 2024, and June 30, 2023.

Our contract liabilities and

advance from customers are as follows:

Schedule of contract liabilities and advance

from customers

We did not have any un-invoiced receivables for the periods

ended June 30, 2025 and 2024.

Our contract liabilities

are as follows:

Schedule of contract liabilities

June 30, 2025

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Undelivered products

Accrued marketing development funds

Performance Obligations

A performance obligation is a

promise in a contract to transfer a distinct good and/or service to the customer and is the unit of measurement in Topic 606.

A performance obligation is

a promise in a contract to transfer a distinct good and/or service to the customer and is the unit of measurement in Topic 606.

inception, we assess the products and/or services promised in our contracts with customers.

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promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices.

Our performance obligations are

satisfied at a point in time.

Revenue from products transferred to customers at a single point in time accounted for over 99 % of net sales

for the year ended June 30, 2024 and 2023.

Revenue for non-recurring engineering projects is based on the percentage completion of a project

and accounted for under 1 % of net sales for the years ended June 30, 2024 and 2023.

Most of our revenue that is recognized at a point

in time is for the sale of hot-spot router products.

Revenue from these contracts is recognized when the customer can direct the use of

and obtain substantially all of the benefits from the product, which generally coincides with title transfer at completion of the shipping

Our performance obligations

are satisfied at a point in time.

Revenue from products transferred to customers at a single point in time accounted for 99.2 % and 98.8 %

of net sales for the years ended June 30, 2025 and 2024.

Revenue recognized over a period of time is based on the percent completion of

a project and accounted for under 1.0 % and 1.2 % of net sales for the years ended June 30, 2025 and 2024, respectively.

The majority of

our revenue recognized at a point in time is for the sale of hotspot router products.

Revenue from these contracts is recognized when

the customer is able to direct the use of and obtain substantially all of the benefits from the product, which generally coincides with

title transfer at completion of the shipping process.

As of June 30, 2025 and 2024,

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Cost of Goods Sold

All costs associated with our

contract manufacturers, as well as distribution, fulfillment and repair services, are included in our cost of goods sold.

Cost of goods

sold also includes amortization expenses of approximately $ 970,000 and $ 800,000 associated with capitalized product development costs

associated with complete technology for the years ended June 30, 2024, and 2023, respectively.

All costs associated with

our contract manufacturers, as well as distribution, fulfillment and repair services, are included in our cost of goods sold.

goods sold also includes amortization expenses of approximately $ 790,000 and $ 970,000 related to capitalized product development costs

associated with completed technology for the years ended June 30, 2025, and 2024, respectively.

Capitalized Product Development Costs

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Research and Development Costs

Costs associated with research and development

are expensed as incurred.

Research and development costs were $ 3,406,750 and $ 3,918,664 for the years ended June 30, 2024, and 2023, respectively.

We provide a warranty for one

year which is covered by our vendors and manufacturers under purchase agreements between the Company and the vendors.

As a result, we

believe we do not have any net warranty exposure and do not accrue any warranty expenses.

Costs associated with research

and development are expensed as incurred.

Research and development costs were $ 4,102,660 and $ 3,406,750 for the years ended June 30, 2025,

and 2024, respectively.

We provide a warranty for

one year which is covered by our vendors and manufacturers under purchase agreements between the Company and the vendors.

we believe we do not have any net warranty exposure and do not accrue any warranty expenses.

Historically, the Company has not experienced

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statements of cash flow, we consider all highly liquid investments purchased with original maturities of three months or less to be cash

We invest our excess cash into financial instruments which management believes are readily convertible into cash, such as

money market funds that are readily convertible to cash and have a $1.00 net asset value.

Short Term Investments

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Inventories, Net

Our inventories consist of finished

goods and are stated at the lower of cost or net realizable value, cost being determined on a first-in, first-out basis.

We assess the

inventory carrying value and reduce it, if necessary, to its net realizable value based on customer orders on hand, and internal demand

forecasts using management’s best estimates given information currently available.

Our customer demand is highly unpredictable and

can fluctuate significantly caused by factors beyond our control.

We may write down our inventory value for potential obsolescence and

excess inventory.

As of June 30, 2024, and 2023, we have recorded inventory reserves in the amount of $ 91,482 and $ 585,274 , respectively,

for inventories that we have identified as obsolete or slow-moving.

Our inventories consist

of finished goods and are stated at the lower of cost or net realizable value, cost being determined on a first-in, first-out basis.

We assess the inventory carrying value and reduce it, if necessary, to its net realizable value based on customer orders on hand,

and internal demand forecasts using management’s best estimates given information currently available.

Our customer demand is

highly unpredictable and can fluctuate significantly caused by factors beyond the Company’s control.

We may write down our

inventory value for potential obsolescence and excess inventory.

For the years ended June 30, 2025, and 2024, we recorded reserve

allowances of $ 63,846 and $ 16,934 , respectively, for inventories we have identified as obsolete or slow-moving.

As of June 30, 2025,

the reserve balance for slow-moving inventories was $ 11,114 , following a $ 144,214 write-down of our inventory's value due to

obsolescence.

As of June 30, 2024, the reserve balance was $ 91,482 with no write-down of our inventory’s value due to

obsolescence.

Property and Equipment, Net

Property and equipment are recorded

Property and equipment are

recorded at cost.

Significant additions or improvements extending the useful lives of assets are capitalized.

Maintenance and repairs of expense

nature are charged to expense as incurred.

Depreciation is computed using the straight-line method over the estimated useful lives as

Maintenance and repairs

of an expense nature are expensed as incurred.

Depreciation is computed using the straight-line method over the estimated useful lives

Schedule of estimated useful lives

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Net Intangible

Complete technology

Technology in progress

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Amortization expense recognized

during the years ended June 30, 2024, and 2023 were $ 992,699 and $ 839,595 , respectively.

for the years ended June 30, 2025, and 2024 were $ 827,091 and $ 992,699 , respectively.

For the year ended June 30, 2025, we disposed of

fully amortized certifications and licenses of $ 824,706 and completed technology of $ 18,397 .

For the year ended June 30, 2024, we disposed

of fully amortized intangible assets in the amounts of $ 86,884 and expensed technology in progress of $ 9,404 .

For the year ended June

30, 2023, we did no t dispose of intangible assets.

The amortization expenses of the

definite lived intangible assets for the next five years and thereafter are as follows:

of fully amortized certifications and licenses of $ 86,884 and expensed technology in progress of $ 9,404 .

The amortization expenses

of the definite lived intangible assets for the next five years and thereafter are as follows:

Schedule of amortization expenses of the

definite lived intangible assets

of Long-lived Assets

In accordance with ASC 360, “Property,

Plant, and Equipment,” we review for impairment of long-lived assets and certain identifiable intangibles whenever events or circumstances

indicate that the carrying amount of assets may not be recoverable.

We consider the carrying value of assets may not be recoverable based

upon our review of the following events or changes in circumstances:

the asset’s ability to continue to generate income from operations

and positive cash flow in future periods;

Impairment of Long-lived Assets

In accordance with ASC 360,

“Property, Plant, and Equipment,” we review for impairment long-lived assets and certain identifiable intangibles whenever

events or circumstances indicate that the carrying amount of assets may not be recoverable.

We consider the carrying value of assets may

not be recoverable based upon our review of the following events or changes in circumstances:

the asset’s ability to continue to

generate income from operations and positive cash flow in future periods;

loss of legal ownership or title to the assets;

significant changes in our strategic business

objectives and utilization of the asset;

changes in our strategic business objectives and utilization of the asset;

or significant negative industry or economic trends.

An impairment loss would be recognized when

estimated future cash flows expected to result from the use of the asset are less than its carrying amount.

An impairment

loss would be recognized when estimated future cash flows expected to result from the use of the asset are less than its carrying amount.

We are not aware of any events

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Stock-based Compensation

The Company accounts for stock

options and other equity-based compensation issued in accordance with ASC 718 “Stock Compensation”, which requires the measurement

We account for stock options

and other equity-based compensation issued in accordance with ASC 718 “Stock Compensation”, which requires the measurement

and recognition of compensation expense related to the fair value of equity-based compensation awards that are ultimately expected to

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awards modified, repurchased, or cancelled during the periods reported.

The Company uses the asset and

liability method of accounting for income taxes.

Accordingly, deferred tax assets and liabilities are determined based on the difference

between the financial statement and income tax bases of assets and liabilities, using enacted tax rates in effect for the year in which

the differences are expected to reverse.

A valuation allowance is recorded to reduce the carrying amount of deferred tax assets, unless

it is more likely than not such assets will be realized.

Current income taxes are based on the year’s taxable income for federal

and state income tax reporting purposes and the annual change in deferred taxes.

The Company assesses its income

tax positions and records tax benefits based upon management’s evaluation of the facts, circumstances, and information available

at the reporting date.

For those tax positions where it is more likely than not that a tax benefit will be sustained, the Company records

the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority

having full knowledge of all relevant information.

For those income tax positions where it is not more likely than not that a tax benefit

will be sustained, no tax benefit is recognized in the financial statements.

The Company classifies interest and penalties associated

with such uncertain tax positions as a component of income tax expense.

We use the asset and liability

method of accounting for income taxes.

Accordingly, deferred tax assets and liabilities are determined based on the difference between

the financial statement and income tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences

are expected to reverse.

A valuation allowance is recorded to reduce the carrying amount of deferred tax assets, unless it is more likely

than not such assets will be realized.

Current income taxes are based on the year’s taxable income for federal and state income

tax reporting purposes and the annual change in deferred taxes.

We assess income tax positions

and record tax benefits based upon management’s evaluation of the facts, circumstances, and information available at the reporting

For those tax positions where it is more likely than not that a tax benefit will be sustained, we record the largest amount of tax

benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority having full knowledge of

all relevant information.

For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no

tax benefit is recognized in the financial statements.

We classify interest and penalties associated with such uncertain tax positions

as a component of income tax expense.

(Loss) Earnings per Share Attributable to Common

In accordance with ASC 260,

(loss) earnings per share are calculated by dividing the net (loss) income by the weighted-average number of common shares that were outstanding

for the period, without consideration for potential common shares.

Diluted (loss) earnings per share is calculated by dividing the net

(loss) income by the sum of the weighted-average number of dilutive potential common shares outstanding for the period determined using

the treasury-stock method or the as-converted method.

Potentially dilutive shares are comprised of common stock options outstanding under

our stock plan.

Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive.

Antidilutive shares are not taken into account while computation of weighted average number of shares for dilutive EPS calculation.

basic earnings (loss) per share are calculated by dividing the net income (loss) by the weighted-average number of common shares that

were outstanding for the period, without considering any potential future issuance of common shares.

Diluted (loss) earnings per share

is calculated by dividing the net income (loss) by the sum of the weighted-average number of dilutive potential common shares outstanding

for the period determined using the treasury-stock method.

Potentially dilutive shares are comprised of common stock options outstanding

under our stock plan.

Diluted EPS excludes all dilutive potential common shares if their effect is nondilutive.

Nondilutive shares are

not taken into account when computing the weighted average number of shares used in the dilutive EPS calculation.

Concentrations of Credit Risk

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provide an allowance for potential credit losses as deemed necessary.

No reserve was required or recorded for any of the periods presented.

$ 158,400 reserve was recorded for the year ended June 30, 2025,

and no reserve was required or recorded for the year ended June 30, 2024.

Substantially all of our revenues

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of our existing customers could impair our ability to operate effectively.

A significant portion of our revenue

is derived from a small number of customers.

For the year ended June 30, 2024, net sales to our two largest customers represented approximately

68 % and 22 % of our consolidated net sales, respectively, and 0 % and 85 % of our accounts receivable balance as of June 30, 2024.

year ended June 30, 2023, net sales to our two largest customers represented approximately 61 % and 31 % of our consolidated net sales,

respectively, and 27 % and 69 % of our accounts receivable balance as of June 30, 2023.

A significant portion of our

revenue is derived from a small number of customers.

For the year ended June 30, 2025, net sales to our two largest customers represented

approximately 61 % and 33 % of our consolidated net sales, respectively, and 34 % and 57 % of our accounts receivable balance as of June 30,

For the year ended June 30, 2024, net sales to our two largest customers represented approximately 68 % and 22 % of our consolidated

net sales, respectively, and 0 % and 85 % of our accounts receivable balance as of June 30, 2024.

For the year ended June 30,

2025, we purchased the majority of our wireless data products from two manufacturing companies located in Asia.

If they were to experience delays,

capacity constraints or quality control problems, product shipments to our customers could be delayed, or our customers could consequently

elect to cancel the underlying product purchase order, which would negatively impact our revenue.

For the year ended June 30, 2024, we

purchased wireless data products from two suppliers in the amount of $ 23,581,572 , or 98.9 % of total purchases, and had related accounts

payable of $ 6,263,385 as of June 30, 2024.

For the year ended June 30, 2023, we purchased wireless data products from these suppliers

in the amount of $ 37,505,858 , or 99.6 % of total purchases, and had related accounts payable of $ 12,598,741 as of June 30, 2023.

If they were to experience

delays, capacity constraints or quality control problems, product shipments to our customers could be delayed, or our customers could

consequently elect to cancel the underlying product purchase order, which would negatively impact our revenue.

For the year ended June

30, 2025, we purchased wireless data products from two suppliers in the amount of $ 31,999,540 , or 85.3 % of total purchases, and had related

accounts payable of $ 5,641,183 , or 69.5 %, as of June 30, 2025.

For the year ended June 30, 2024, we purchased wireless data products from

two suppliers in the amount of $ 23,581,572 , or 98.9 % of total purchases, and had related accounts payable of $ 6,263,385 , or 86.2 %, as

of June 30, 2024.

We maintain our cash accounts

with established commercial banks.

Such cash deposits exceed the Federal Deposit Insurance Corporation insured limit of $250,000 for each

financial institution.

However, we do not anticipate any losses on excess deposits.

with established commercial banks in the United States of America (the “U.S.”) and Korea.

Such cash deposits exceed the Federal

Deposit Insurance Corporation insured limit of $250,000 and the Korea Deposit Insurance Corporation insured limit of approximately $ 37,000

for each financial institution located in the U.S.

and Korea, respectively.

We have approximately $ 28.3 million and $ 11.5 million in uninsured

deposits in the U.S.

and Korea, respectively, but we do not anticipate any losses on excess deposits.

Recently Issued Accounting Pronouncements

In September 2022, the

FASB issued ASU No.

2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50) .

The ASU requires disclosure of the

key terms of outstanding supplier finance programs and a rollforward of the related obligations.

The ASU does not affect the recognition,

measurement or financial statement presentation of supplier finance program obligations.

The ASU is effective for annual and interim periods

beginning after December 15, 2022, except for the rollforward requirement, which is effective for annual periods beginning after December

There was no impact to our consolidated financial statements.

2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

Improvements to Reportable Segment Disclosures (Topic 280).

This ASU updates reportable segment disclosure requirements by requiring disclosures

of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and

included within each reported measure of a segment’s profit or loss.

This ASU also requires disclosure of the title and position of the

individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in

assessing segment performance and deciding how to allocate resources.

The ASU is effective for annual periods beginning after December

15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Adoption of the ASU should be applied retrospectively

to all prior periods presented in the financial statements.

Early adoption is also permitted.

This ASU will likely result in the required

additional disclosures being included in our consolidated financial statements, once adopted.

In December 2023, the

FASB issued ASU No.

In December 2023, the FASB

issued ASU No.

2023-09, Improvements to Income Tax Disclosures (Topic 740).

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in our consolidated financial statements once adopted.

In November 2024, the FASB

issued ASU No.

2024-03, Expense Disaggregation Disclosures (Subtopic 220-40).

The ASU requires disclosure of specified information about

certain costs and expenses.

This includes purchases of inventory, employee compensation, depreciation, and intangible asset amortization.

The ASU is effective on a prospective or retrospective basis for annual reporting periods beginning after December 15, 2026, and interim

reporting periods beginning after December 15, 2027.

Early adoption is permitted.

This ASU will likely result in the required additional

disclosures being included in our consolidated financial statements, once adopted.

In January 2025, the FASB

issued ASU 2025-01, which revises the effective date of ASU 2024-03, “to clarify that all public business entities are required

to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods

beginning after December 15, 2027.” Entities within the ASU’s scope are permitted to early adopt the ASU.

This ASU will likely

result in the required additional disclosures being included in our consolidated financial statements, once adopted.

NOTE 3 - ACCRUED LIABILITIES

Accrued liabilities consist of

the following as of:

Accrued liabilities consist

of the following as of:

Schedule of accrued liabilities

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Accrued payroll deductions owed to government entities

Accrued salaries and bonuses

Accrued bonuses to an officer (1)

Accrued salaries (2)

Accrued vacation

Accrued commission for service providers

Accrued commission to a customer

Accrued marketing development funds (3) (4)

Other accrued liabilities ( 5 )

On November 10, 2022, the

Company and OC Kim, its President, entered into an amendment of the employment letter agreement dated September 7, 2021.

The amendment

provides for the payment of an incentive bonus to Mr.

Kim of $125,000 for each calendar quarter during the remaining four-year term of

the employment letter, which will be total amount of $2M, with the first such bonus accrued on December 31, 2022.

For the year ended June

30, 2024 and 2023, $ 500,000 and $ 375,000 bonus had been accrued, respectively, with $ 875,000 and $ 375,000 accrual bonus balances as of

June 30, 2024 and 2023, respectively.

The Company accrued a commission

of approximately $ 650,000 to a customer to provide a financial support for its sales program during the 2021 fiscal year.

commission has been paid approximately $ 400,000 in the form of credit with the remaining balance of approximately $ 250,000 as of June

(1) On November 10, 2022, the Company and OC Kim, its President, entered into an amendment of the employment

agreement dated September 7, 2021.

The amendment provides for the payment of an incentive to Mr.

Kim, of $125,000 for each calendar quarter

during the remaining four-year term of the employment agreement, for an aggregate total of $2 million, with the first such bonus accrued

on December 31, 2022.

Incentive bonuses of $500,000 have been accrued for each of the years ended June 30, 2025 and 2024, resulting in

accrued bonus balances of $1,375,000 and $875,000 as of June 30, 2025 and 2024, respectively.

As of June 30, 2025, no payment for the

accrued bonuses has been made by the Company.

On September 23, 2024, the Board acknowledged

Kim had earned an incentive bonus of $1,250,000 for negotiating and securing a joint venture agreement which resulted in the

organization of Sigbeat.

The Company and Mr.

Kim entered into a Forbearance Agreement, dated September 23, 2024, under which Mr.

to defer the bonus, in exchange for the Company’s agreement to allow Mr.

Kim to defer payment of the $1,000,000 settlement amount

Kim to the Company under a Settlement Agreement, dated June 12, 2024.

On January 16, 2025, there was a completed contribution

for Common Stock of Sigbeat, and the Company accrued the deferred incentive bonus of $1,250,000 to Mr.

As of June 30, 2025, no payment

for the accrued has been made by the Company.

(2) The Company accrued regular salaries of $132,377 to employees for the payroll period ended June 30, 2025,

and the payment of the accrued salaries was made by the Company on July 1, 2025.

(3) The Company accrued a liability for marketing development funds owed to a customer of $673,205 to provide

financial support for its marketing and promotion programs of our products for the year ended June 30, 2025.

(4) The Company accrued a liability for marketing development funds owed to a customer of approximately $650,000

to provide financial support for its marketing and promotion programs during the 2021 fiscal year.

Of the amount accrued, total payments

were made of approximately $400,000 in the form of credit memos.

The remaining balance of approximately $250,000 as of June 30, 2024,

was eliminated/written-off as of September 30, 2024 because it was confirmed that the liability no longer existed.

(5) On or about December 7, 2023, the Company received an invoice from our prior landlord, Hunsaker &

Associates, requesting payment of additional rent on its completed and expired lease of office space located at 9707 Waples Street, San

Diego, CA as of December 31, 2023.

This invoice of $142,978 purports to represent charges for variable cost increases during the prior

7 years of the lease, which was discounted by $46,274 and adjusted down to $96,704 for the three months ended June 30, 2024.

is currently reviewing these charges and will be requesting further validation of these charges, in accordance with its rights granted

under the lease.

For the year ended June 30, 2024, the Company recorded an additional rent expense of $96,704 and an accrued liability

of $72,048 reflecting this pending invoice and a credit of $24,656 for our deposit on the leasehold property.

NOTE 4 - INCOME TAXES

Income tax benefit for the years

ended June 30, 2024, and 2023 consists of the following:

Income tax benefit for the

years ended June 30, 2025, and 2024 consists of the following:

Schedule of income tax benefit

Year Ended June 30,

Years Ended June 30,

Current income tax (benefit) expense:

Total Current income tax expense (benefit)

Deferred income tax benefit:

Deferred income tax (benefit) expense:

Total deferred income tax expense (benefit)

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$ ( 949,300 )

$ ( 886,659 )

The benefit for income taxes reconciles

The income tax benefit reconciles

to the amount computed by applying the effective federal statutory income tax rate to the income before provision for income taxes as

Schedule of effective federal statutory income tax rate to the income before provision for income taxes

Year Ended June 30,

Federal income tax, at statutory rate of 21% applied to (loss) earnings before income taxes and extraordinary items

$ ( 1,074,307 )

Years Ended June 30,

Federal income tax, at statutory rate of 21% applied to loss before income taxes and extraordinary items

$ ( 1,074,307 )

State tax, net of federal tax benefit

State tax, net of federal tax (benefit) expense

Nondeductible expenses

Foreign rate difference

Change in valuation allowance

Benefit for income taxes

$ ( 949,300 )

$ ( 886,659 )

Deferred income taxes reflect

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Lease accounting, net

Legal contingency expense reserve

Bad debt expense reserve

Inventory reserve

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Net deferred tax asset

Deferred income tax assets and

liabilities are recorded for differences between the financial statement and tax basis of the assets and liabilities that will result

Deferred income tax assets

and liabilities are recorded for differences between the financial statement and tax basis of the assets and liabilities that will result

in taxable or deductible amounts in the future based on enacted laws and rates applicable to the periods in which the differences are

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will be fully realized, and no valuation allowance is necessary to record as of June 30, 2025, or 2024.

As of June 30, 2024, we have federal

and state net operating loss carryforwards of approximately $ 5.8 million and $ 0.5 million , respectively.

Under the Tax Cuts and Jobs Act,

the federal net operating loss of approximately $ 5.8 million , which will carry forward indefinitely.

The state net operating loss of approximately

$ 0.5 million will begin to expire through 2043.

The utilization of net operating loss carryforwards may be subject to limitations under

provisions of the Internal Revenue Code Section 382 and similar state provisions.

We apply the provisions of ASC

740 related to accounting for uncertain tax positions, which prescribes a recognition threshold and measurement process for recording

As of June 30, 2025, we have

federal and state net operating loss carryforwards of approximately $ 2.7 million and $ 0.7 million , respectively.

Under the Tax Cuts and

Jobs Act, the federal net operating loss of approximately $ 2.7 million , which will carry forward indefinitely.

The state net operating

loss of approximately $ 0.7 million will begin to expire in 2043.

The utilization of net operating loss carryforwards may be subject to

limitations under provisions of the Internal Revenue Code Section 382 and similar state provisions.

We apply the provisions of

ASC 740 related to accounting for uncertain tax positions, which prescribes a recognition threshold and measurement process for recording

in the financial statements uncertain tax positions taken or expected to be taken in a tax return.

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Balance as of June 30, 2024

Gross increase

Gross decrease

Balance as of June 30, 2025

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NOTE 5 – (LOSS) EARNINGS PER SHARE

We report (loss) earnings per

share in accordance with ASC 260, “Earnings Per Share.” Basic (loss) earnings per share are computed using the weighted average

number of shares outstanding during the period.

Diluted (loss) earnings per share represent basic earnings per share adjusted to include

the potentially dilutive effect of outstanding stock options by using the treasury stock method that the proceeds we receive from an in-the-money

option exercise are used towards repurchasing common shares in the market.

We report (loss) earnings

per share in accordance with ASC 260, “Earnings Per Share.” Basic (loss) earnings per share are computed using the weighted

average number of shares outstanding during the period.

Diluted (loss) earnings per share represent basic earnings per share adjusted

to include the potentially dilutive effect of outstanding stock options by using the treasury stock method, which assumes that the proceeds

from assumed option exercises are used to repurchase common shares in the market.

For the years ended June 30,

and 2023, we were in a net loss position and have excluded 627,001 and 647,001 stock options from the calculation of diluted net loss

per share because these securities are anti-dilutive.

The weighted average number of

shares outstanding used to compute loss per share is as follows:

2025, and 2024, we were in a net loss position and have excluded 392,001 and 627,001 stock options from the calculation of diluted net

loss per share because these securities are anti-dilutive.

The weighted average number

of shares outstanding used to compute loss per share is as follows:

Schedule of weighted average number of

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NOTE 6 - COMMITMENTS AND CONTINGENCIES

We adopted ASC 842 new lease accounting

on July 1, 2019.

We adopted ASC 842 new lease

accounting on July 1, 2019.

We had an operating lease principally for both Franklin Wireless Corp.

and Franklin Technologies Inc., in accordance

with ASC 842.

and Franklin Technologies Inc., in

accordance with ASC 842.

We determine whether an arrangement

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for consideration.

Operating leases are recorded in the balance sheet as right-of-use assets (“ROU assets”) and operating lease

Operating leases are recorded in the balance sheet as right-of-use asset (“ROU asset”) and operating lease

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent

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date of the lease and measure based on the present value of lease payment over the lease term.

The ROU assets also includes deferred rent

The ROU asset also includes deferred rent

Our lease arrangement generally does not provide an implicit interest rate.

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options to extend or terminate the lease when it is reasonably certain that it will exercise that option in the measurement of its ROU

assets and liabilities.

assts and liabilities.

Lease expense for operating lease is recognized on a straight-line basis over the lease term.

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to this property was $ 337,322 and $ 321,259 for the years ended June 30, 2025 and 2024.

On or about December 7 ,

On or about December 7 th ,

2023, we received an invoice from our prior landlord, Hunsaker & Associates, requesting payment of additional rent on our completed

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leasehold property.

Our Korea-based subsidiary, FTI,

leases approximately 10,000 square feet of office space, at a monthly rent of approximately $8,000, and additional office space consisting

of approximately 2,682 square feet at a monthly rent of approximately $2,700, both located in Seoul, Korea.

These leases expired on August

31, 2024, and were extended for an additional 24 months to August 31, 2026.

In addition to monthly rent, the leases provide for periodic

cost of living increases in the base rent and payment for certain common area costs.

These facilities are covered by an appropriate level

of insurance, and we believe them to be suitable for our use and adequate for our present needs.

Our Korea-based subsidiary,

FTI, leases approximately 10,000 square feet of office space, at a monthly rent of approximately $6,600, and additional office space consisting

of approximately 2,682 square feet at a monthly rent of approximately $2,200, both located in Seoul, South Korea.

These leases expired

on August 31, 2024, and were extended for an additional 24 months to August 31, 2026.

In addition to monthly rent, the leases provide

for periodic cost of living increases in the base rent and payment for certain common area costs.

These facilities are covered by an appropriate

level of insurance, and we believe them to be suitable for our use and adequate for our present needs.

Rent expense related to these leases

was approximately $ 112,206 and $ 128,400 for each of the years ended June 30, 2024 and 2023, respectively.

Short-term leases with initial

terms of twelve months or less are not capitalized, and our leases of the South Korean offices and corporate housing facility have been

considered as short-term lease.

was $ 105,889 and $ 112,206 for each of the years ended June 30, 2025 and 2024, respectively.

We lease one corporate housing

facility, located in Seoul, Korea, primarily for our employees who travel, under a non-cancelable operating lease that expired on September

4, 2024, and was extended for an additional twelve months to September 4, 2025.

Rent expense related to this lease was $ 8,089 and $ 8,095

for the years ended June 30, 2024 and 2023, respectively.

We used a discount rate of 4.0 %

in determining our operating lease liabilities for the office space that expired on December 31, 2023, and used a discount rate of 7.0 %

for the office space that commenced on January 1, 2024, in San Diego, California, respectively.

These rates represented our incremental

borrowing rates at that time.

Short-term leases with initial terms of twelve months or less are not capitalized, and our leases of the

South Korean offices and corporate housing facility have been considered as short-term leases.

Rent expenses for the years ended

June 30, 2024, and 2023 were $ 554,052

4, 2025, and was extended for an additional 12 months to September 4, 2026.

Rent expense related to this lease was $ 8,077 and $ 8,089 for

the years ended June 30, 2025 and 2024, respectively.

We lease one corporate vehicle on December 1, 2024, in San Diego, California, for

our employees, under a non-cancelable lease that expires on November 30, 2027.

Rent expense related to this lease was $ 6,473 and $ 0 for

the years ended June 30, 2025 and 2024, respectively.

We used discount rates of

7.0 % and 6.0 % in determining our operating lease liabilities for the office spaces in San Diego, California, and South Korea, respectively,

and used a discount rate of 7.0 % in determining our lease liabilities for the vehicle.

These rates represented our incremental borrowing

rates at that time.

Short-term leases with initial terms of twelve months or less are not capitalized.

The office leases of our Korea-based

subsidiary were extensions of previous leases and do not contain any further extension provisions.

Rent expenses for the years

ended June 30, 2025, and 2024 were $ 469,910

and $ 538,258 respectively.

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2025, and 2024 are as follows:

Schedule of components of the lease expense and supplemental

cash flow information related to leases

Schedule of components of the lease expense and supplemental cash flow information related to leases

Years ended June 30,

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Additional charges for the prior operating lease subject to dispute

Vehicle lease expense

Short term lease cost

Total lease expense

In accordance with ASC 842, future

minimum payments under operating leases are as follows:

Schedule of future

minimum payments under operating leases

In accordance with ASC 842,

future minimum payments under operating leases are as follows:

Schedule of future minimum payments under operating leases

Operating Lease

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Less imputed interest

Remaining lease term-operating leases

Discount rate-operating lease

Remaining lease term-operating lease in San Diego, California

Discount rate-operating lease in San Diego, California

Remaining lease term-operating lease in South Korea

Discount rate-operating lease in South Korea

Remaining lease term-vehicle lease in San Diego, California

Discount rate-vehicle lease in San Diego, California

We are from time to time involved

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Verizon Jetpack Recall

On April 8, 2021, Verizon issued

a press release announcing that it was working with the U.S.

Consumer Product Safety Commission (CPSC) to conduct a voluntary recall of

certain Verizon Ellipsis Jetpack mobile hotspot devices, indicating that the lithium-ion battery in the devices can overheat, posing a

fire and burn hazard.

On April 8, 2021, Verizon

issued a press release announcing that it was working with the U.S.

Consumer Product Safety Commission (CPSC) to conduct a voluntary recall

of certain Verizon Ellipsis Jetpack mobile hotspot devices, indicating that the lithium-ion battery in the devices can overheat, posing

a fire and burn hazard.

According to the CPSC release, the recall affects approximately 2.5 million devices.

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supplied them to Verizon.

Verizon first advised us of one

alleged Jetpack device failure at the end of February 2021.

We immediately began meeting with Verizon and requested access to the device.

Verizon first advised us of

one alleged Jetpack device failure at the end of February 2021.

We immediately began meeting with Verizon and requested access to the

We also began internal testing to evaluate device performance.

We did not receive any further incident information until the last week

of March 2021.

We did not receive any further incident information until the last

week of March 2021.

On April 1, 2021 we issued a press release announcing that we had received reports from Verizon about potential issues

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On April 9, 2021 we issued a press release announcing the voluntary recall by Verizon.

As of the date of this report,

we have been unable to recreate any device failures of the type identified by Verizon.

All internal testing conducted to date has confirmed

that the Jetpack devices are performing within normal parameters.

We are not currently aware of any aspect of the Jetpack design that

could cause the devices to fail in the way described in Verizon’s recall notice.

We are not currently aware

of any aspect of the Jetpack design that could cause the devices to fail in the way described in Verizon’s recall notice.

Future Impact on Financial

We are striving to avoid any litigation

with Verizon arising from the recall and have not been served with any legal action by Verizon relating to the products covered by the

We are not currently able to estimate the financial impact of the recall on our future operations.

Performance Arising from Verizon Jetpack Recall

At this time, we do not have

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litigation because the Company believes that any such liability is not probable and reasonably estimable at this time.

FTI Litigation in Korea

In January of 2025 our South

Korea-based subsidiary, FTI was sued by Partron Co., Ltd., a South Korean manufacturer of electronic parts for mobile and telecommunication

devices (“Partron”).

The complaint, filed in Seoul Central District Court, alleges that FTI requested Partron to prepare semiconductor

components to be included in FTI’s products for resale to third parties.

The complaint also alleges that FTI and Partron had entered

into a Confidentiality Agreement under which Partron shared the login credentials for its Qualcomm account and that FTI used such access

for the design of the products but contracted with another vendor to produce the components.

It further alleges that Partron ordered a

large quantity of semiconductor components from its business partners, such as Qualcomm and Dasaron Corporation, in reliance on such requests

from FTI, but FTI failed to complete the purchase of such components from Partron.

Parton alleges that it paid its suppliers for such

components, but that FTI failed to purchase the components from Partron, resulting in damages, including interest, of $ 8,126,786 , under

the South Korean Unfair Competition Prevention Act and other legal theories.

The Company owns approximately

66.34 % of the outstanding equity securities of FTI.

The action does not name the Company as a defendant.

FTI has advised the Company that

it does not believe the allegations are supported by the facts and it intends to vigorously oppose the action.

Shareholder Litigation

A shareholder action, Ali vs.

A shareholder action, Ali

Franklin Wireless Corp.

Case #3:21-cv-00687-AJB-MSB, was filed in the U.S.

District Court, Southern District of California (San

Diego) on April 16, 2021, alleging, among other things, that we had prior knowledge that the Verizon recall was likely and that we did

not disclose that information to investors in a timely manner.

The Class and Defendants have executed a Stipulation and Agreement of Settlement

under which the Class releases all claims against Defendants in exchange for a payment by Defendants of $ 2.4 million (the “Settlement

Amount”), which is reflected in liabilities under “accrued legal contingency expense” with a corresponding charge to

“loss from a legal contingency”.

The Class has submitted a motion for preliminary approval of the settlement, which the Court

denied on January 24, 2024.

On April 22, 2024, after resubmission of the application, the court granted preliminary approval of the

On May 6, 2024, per the terms of the settlement agreement, we sent by wire transfer $ 2,400,000 to an account specified by

the Ali class action claim administrator, Epiq (the appointed Settlement Administrator by the Court).

District Court, Southern District of California

(San Diego) on April 16, 2021, alleging, among other things, that we had prior knowledge that the Verizon recall was likely and that we

did not disclose that information to investors in a timely manner.

The Class and Defendants have executed a Stipulation and Agreement

of Settlement under which the Class releases all claims against Defendants in exchange for a payment by Defendants of $ 2.4 million (the

“Settlement Amount”), which is reflected in liabilities under “accrued legal contingency expense” with a corresponding

charge to “loss from a legal contingency”.

The Class has submitted a motion for preliminary approval of the settlement, which

the Court denied on January 24, 2024.

On April 22, 2024, after resubmission of the application, the court granted preliminary approval

of the settlement.

On May 6, 2024, per the terms of the settlement agreement, we sent by wire transfer $ 2,400,000 to an account specified

by the Ali class action claim administrator, Epiq (the appointed Settlement Administrator by the Court).

Harwood / Martin

A legal action was filed in the

A legal action was filed in

District Court, Southern District of California (San Diego) against Franklin, as a nominal defendant, by Stephen Harwood, derivatively

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We believe these allegations are not supported by the facts and we will vigorously defend against such claims.

A legal action was filed in the

A legal action was filed in

District Court, Southern District of California (San Diego) against Franklin, as a nominal defendant, by Debra Martin, derivatively

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have been consolidated into a single action in the U.S.

District Court, Southern District of California (San Diego) titled “In

re Franklin Wireless Corp.

District Court, Southern District of California (San Diego) titled “In re

Franklin Wireless Corp.

Derivative Litigation,” Case No.:

21cv1837-AJB (MSB).

Discovery has been completed and trial has been

scheduled to begin on December 9, 2024.

A legal action was filed in the

Second Judicial District Court of Nevada in the County of Washoe against Franklin, as a nominal defendant, Barbara Pape, derivatively

A jury trial was held in December 2024.

On December 19 th ,

2024, after an 8-day trial, the jury returned a verdict finding only nominal damages of $0.99 against a single director and no damages

against all other defendants.

A legal action was filed in

the Second Judicial District Court of Nevada in the County of Washoe against Franklin, as a nominal defendant, Barbara Pape, derivatively

on behalf of nominal defendant Franklin Wireless Corp.

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other things, that we had prior knowledge that the recall was likely and that we did not disclose that information to investors in a timely

We believe these allegations are not supported by the facts and we will vigorously defend against such claims.

The Company will vigorously defend

such shareholder litigation and proceedings.

No liability has been recorded for these litigations because the Company believes that any

such liability is not probable and reasonably estimable as of the reporting date.

“Short-Swing” Profits

A legal action was filed in the

District Court, Southern District of California (San Diego) against Franklin, as a nominal defendant, Nosirrah Management LLC v.

Following the jury verdict in the consolidated Harwood and Martin action finding only nominal damages, the parties agreed to dismiss

On August 12, 2025, the court formally dismissed the case.

“Short-Swing”

Profits Litigation

A legal action was filed in

District Court, Southern District of California (San Diego) against Franklin, as a nominal defendant, Nosirrah Management LLC

Franklin Wireless et al., Case # 3:21-cv-01316-RSH-JLB, on or about July 22, 2021, claiming that our Chief Executive Officer, O.C.

violated Section 16(b) of the Securities Exchange Act of 1934 for receiving “short-swing” profits from a sale and purchase

Kim, violated Section 16(b) of the Securities Exchange Act of 1934 for receiving “short-swing” profits from a sale and purchase

of Franklin shares, in violation of that Act.

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12, 2024, for Mr.

Kim to pay $1,000,000, and the appeal by OC Kim was dismissed (see “Exhibit 10.9”).

On September 23, 2024

the Company and Mr.

Kim entered into a Forbearance Agreement to defer payment of the settlement in exchange for deferment of a $1,250,000

bonus for securing a joint venture agreement with MeiG Smart Technology Co., Ltd.

Kim time to pursue remedies with the State

(see “Exhibit 10.13”)

Loan Agreement with Subsidiary

On March 21, 2022, Franklin Wireless

(the “Company”) entered into a Loan Agreement with Franklin Technology Incorporation, a Republic of Korea corporation

(“FTI”), under which the Company agreed to loan US$ 10,000,000 to FTI.

The Company owns a majority of the outstanding equity

FTI’s primary business is providing design and development services to the Company for our wireless products.

the loan transaction, FTI delivered a $10 million Promissory Note to the Company (the “Note”).

In the preparation of consolidated

financial statements of the Company, the transactions and balances related to the loan of $10 million, including the accrued interest

for the year ended June 30, 2024, were eliminated as intercompany transactions.

The purpose of the loan is to allow FTI to purchase

a facility in South Korea to house its operations, and to provide it with additional working capital.

The purchase of such a facility

with the loan proceeds is subject to the Company’s reasonable approval.

Upon acquisition of the facility, FTI is required to grant

the Company a mortgage on it to secure payment of the Note.

The Note is for a term of five years, provides for annual payments of interest

at 2% per annum, and is due and payable upon maturity.

The Note and Loan Agreement include customary provisions for default and acceleration

upon default, and a default interest rate of 7% per annum.

As of June 30, 2024, there’s no new information regarding the status of the

facility’s acquisition.

Kim to pay $1,000,000, and the appeal by O.C.

Kim was dismissed.

On September 23, 2024 the Company and Mr.

into a Forbearance Agreement to defer payment of the settlement in exchange for deferment of a $1,250,000 bonus for securing a joint venture

agreement to allow Mr.

Kim time to pursue remedies with the State of Nevada.

On January 16, 2025, the

Company accrued the deferred incentive bonus of $ 1,250,000 to OC Kim, its President, and recognized a receivable for the deferred $ 1,000,000

settlement amount owed by Mr.

Kim to the Company.

As of June 30, 2025, no payment for the accrued bonus has been made to Mr.

Company, and the receivable of $ 1,000,000 from Mr.

Kim was partially settled through the May 8, 2025 option repurchase transaction, in

which the $ 337,404 net proceeds otherwise payable to Mr.

Kim were applied against the receivable.

This leaves a remaining settlement balance

of $ 662,596 owed by Mr.

Kim as of June 30, 2025.

Loan Agreement with Subsidiary, FTI

On March 21, 2022, Franklin

Wireless Corp.

(the “Company”) entered into a Loan Agreement with its South Korean subsidiary, FTI, under which the Company

agreed to loan US$ 10,000,000 to FTI.

The Company owns a majority of the outstanding equity of FTI.

FTI’s primary business is providing

design and development services to the Company for our wireless products.

As part of the loan transaction, FTI delivered a $10 million

Promissory Note to the Company (the “Note”).

In the preparation of consolidated financial statements of the Company, the transactions

and balances related to the loan of $10 million, including the accrued interest for the year ended June 30, 2025, were eliminated as intercompany

transactions.

The purpose of the loan is

to allow FTI to purchase a facility in South Korea to house its operations, and to provide it with additional working capital.

of such a facility with the loan proceeds is subject to the Company’s reasonable approval.

Upon acquisition of the facility, FTI

is required to grant the Company a mortgage on it to secure payment of the Note.

The Note is for a term of five years, provides for annual

payments of interest at 2% per annum, and is due and payable upon maturity.

The Note and Loan Agreement includes customary provisions

for default and acceleration upon default, and a default interest rate of 7% per annum.

FTI has not yet acquired a facility for its operations.

The loan proceeds are subject

to foreign exchange fluctuations as the funds are being held in Korea at a Korean bank.

Should the exchange rate rise or fall during the

term of the agreement the return value in the United States Dollar (“USD”) could decrease resulting in a potential loss of

Employment Contracts

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into Change of Control Agreements with OC Kim, our President, and Yun J.

(David) Lee, our Senior Vice President of Sales and previously

(David) Lee, our Senior Vice President of Sales who previously

served as Chief Operating Officer.

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period, a reorganization, merger, consolidation or similar transaction resulting in the transfer of ownership of more than fifty percent

(50%) of the Company’s outstanding Common Stock, or a liquidation or dissolution of the Company or sale of substantially all of the Company’s

(50%) of the Company’s outstanding Common Stock, or a liquidation or dissolution of the Company or sale of substantially all of

the Company’s assets.

The Change of Control Agreement

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On November 10, 2022, the

Company and OC Kim, its President, entered into an amendment of the employment letter agreement dated September 7, 2021.

The amendment

provides for a severance payment of $3 million if Mr.

Company and OC Kim, its President, entered into an amendment of the employment agreement dated September 7, 2021.

The amendment provides

for a severance payment of $3 million if Mr.

Kim voluntarily terminates his employment by the Company or if he voluntarily terminates

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to terminate their employment, or disclose any of the Company’s proprietary information.

In addition, the amendment provides

for the payment of an incentive bonus to Mr.

In addition, the amendment provides for

the payment of an incentive bonus to Mr.

Kim of $125,000 for each calendar quarter during the remaining four-year term of the employment

letter, with the first such bonus due on December 31, 2022.

For the year ended June 30, 2024 and 2023, $ 500,000 and $ 375,000 bonus had

been accrued, respectively, with $ 875,000 and $ 375,000 accrual bonus balances as of June 30, 2024 and 2023, respectively.

agreement, with the first such bonus due on December 31, 2022.

Incentive bonuses of $ 500,000 have been accrued for each of the years ended

June 30, 2025 and 2024, resulting in accrued bonus balances of $ 1,375,000 and $ 875,000 as of June 30, 2025 and 2024, respectively.

of June 30, 2025, no payment for the accrued bonuses has been made by the Company.

The employment agreement with

OC Kim was renewed and extended by the Board in September 2024 and will continue through October 2027.

Joint Venture Agreement

On May 14, 2024, the Company

entered into an Agreement for Formation of a Joint Venture Corporation (the “Agreement”).

Under the terms of the Agreement,

the parties formed a Nevada corporation, Sigbeat, to be owned 60 % by Franklin and 40% by its EMS partner, Forge.

The parties contributed

a total of $ 5,000,000 in capital, in accordance with their respective ownership interest percentages.

Under the terms of the Agreement,

Sigbeat has a Board of Directors consisting of three members, of whom two are to be appointed by the Company and one appointed by Forge.

Sigbeat will engage in worldwide sales, marketing, customer support and operations for telecommunications modules under such brands or

designations as the Board of Directors of Sigbeat determine.

Pursuant to the Agreement,

in July 2024, Sigbeat entered into a stock subscription agreement with Forge to purchase 400,000 shares of Common Stock, representing

40% of the total outstanding Common Stock of Sigbeat.

On December 23, 2024, and January 9, 2025, the Company contributed $ 600,000 and

$ 2,400,000 for Common Stock, respectively, and, on January 16, 2025, Forge contributed $ 2,000,000 for Common Stock.

Forbearance Agreement

On September 23, 2024, the

Board acknowledged that Mr.

Kim had earned an incentive bonus of $ 1,250,000 for negotiating and securing a joint venture agreement with

its EMS partner.

The Company and Mr.

Kim also entered into a Forbearance Agreement on September 23, 2024, under which Mr.

Kim agreed to

defer the bonus, in exchange for the Company’s agreement to allow Mr.

Kim to defer payment of the $ 1,000,000 settlement amount owed

Kim to the Company under a Settlement Agreement, dated June 12, 2024.

On January 16, 2025, the

Company accrued the deferred incentive bonus of $ 1,250,000 to OC Kim, its President, and recognized a receivable for the deferred $ 1,000,000

settlement amount owed by Mr.

Kim to the Company.

As of June 30, 2025, no payment for the accrued bonus has been made to Mr.

Company, and the receivable of $ 1,000,000 from Mr.

Kim was partially settled through the May 8, 2025 option repurchase transaction, in

which the $ 337,404 net proceeds otherwise payable to Mr.

Kim were applied against the receivable.

This leaves a remaining settlement balance

of $ 662,596 owed by Mr.

Kim as of June 30, 2025.

International Tariffs

We believe that our products

are currently exempt from international tariffs upon import from our manufacturers to the United States.

If this were to change at any

point, a tariff of 10%-25% of the purchase price would be imposed.

If such tariffs are imposed, they could have a materially adverse effect

on sales and operating results.

Our products are currently

manufactured in Vietnam.

We believe that our products are currently exempt from international tariffs upon import from our manufacturers

to the United States.

If tariffs are imposed on

our products either based on type of product or the country of manufacture, they could significantly increase our costs to import devices

and potentially reduce or even eliminate our ability to earn profits from the sale of our devices.

Should we be required to use device

manufacturing companies located outside of tariffed countries we will incur significant delays in production and possibly lose sales as

a result of those changes and delays.

Given the unpredictable timing

of Tariff implementation, it is possible that sales could be in process and become subject to a Tariff that would result in losses on

those transactions.

Any such reduction in profit margins, lost sales and or increased costs would likely have a negative impact on the

price of our shares in the market.

Customer Indemnification

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NOTE 7 - LONG-TERM INCENTIVE PLAN AWARDS

We apply the provisions of ASC

718, “Compensation - Stock Compensation,” to all of our stock-based compensation awards and use the Black-Scholes option pricing

model to value stock options.

The fair value of each share option award on the date of grant was estimated using the Black-Scholes method

based on the following weighted average assumptions:

We apply the provisions of

ASC 718, “Compensation - Stock Compensation,” to all of our stock-based compensation awards and use the Black-Scholes option

pricing model to value stock options.

The fair value of each share option award on the date of grant was estimated using the Black-Scholes

method based on the following weighted average assumptions:

The risk-free interest rate is based on the U.S.

treasury yield curve in effect at

the time of grant for periods corresponding with the expected term of options award;

the expected term represents awards granted are expected

to be outstanding giving considerations vesting schedules and historical participant exercise behavior;

the expected volatility is based

upon historical volatility of the dividend yield is based upon the company’s dividend rate at the time fair value is measure and

future expectations.

treasury yield curve in effect

at the time of grant for periods corresponding with the expected term of options award;

the expected term represents the period of time

that options granted are expected to be outstanding, taking into account the vesting provisions and historical exercise patterns of participants;

the expected volatility is based upon historical volatility;

and the dividend yield is based upon the company’s dividend rate at

the time fair value is measure and future expectations.

Under this application, we record compensation expense for all awards granted.

In July of 2020, the Board

of Directors adopted the 2020 Franklin Wireless Corp.

Stock Option Plan (the “2020 Plan”), which covers 800,000 shares of

Common Stock.

The 2020 Plan provides for the grant of incentive stock options, non-qualified stock options and restricted stock to our

employees, directors, and independent contractors.

These options will have such vesting or other provisions as may be established by the

Board of Directors at the time of each grant.

In July of 2020,

the Board of Directors adopted the 2020 Franklin Wireless Corp.

Stock Option Plan (the “2020 Plan”), which covers 1,000,000

shares of Common Stock.

The 2020 Plan provides for the grant of incentive stock options, non-qualified stock options and restricted stock

to our employees, directors, and independent contractors.

These options will have such vesting or other provisions as may be established

by the Board of Directors or Plan Administrator at the time of each grant.

The estimated forfeiture

3 unchanged sentences

from those estimates.

There were $ 295,104 and $ 710,870 compensation expenses recorded under this method for the years ended June 30, 2024,

There was compensation expense of $ 350,593 and $ 295,104 recorded under this method for the years ended June 30,

2025, and 2024, respectively.

A summary of the status of our

stock options is presented below:

As of June 30, 2025, 604,000 shares of Common Stock under the 2020 Plan are available.

A summary of the status of

our stock options is presented below:

Schedule of stock options

3 unchanged sentences

Forfeited or expired

Repurchased(1)

Outstanding as of June 30, 2025

Exercisable as of June 30, 2025

(1) In May 2025, the Company repurchased 200,000 vested stock options from OC Kim, its President, which had

been previously granted through its 2020 employee stock option plan.

The aggregate intrinsic value

2 unchanged sentences

weighted-average grant-date fair value of stock options outstanding as of June 30, 2025, in the amount of 392,001 shares was $ 3.59 per

As of June 30, 2024, there was

unrecognized compensation cost of $ 172,939 related to non-vested stock options granted.

NOTE 8 – STOCKHOLDERS’

As of June 30, 2025, there

was no unrecognized compensation cost related to non-vested stock options granted.

8 – STOCKHOLDERS’ EQUITY

have been authorized to issue 50,000,000 shares of common stock, $ 0.001 par value.

3 unchanged sentences

as well as in the net assets of the corporation upon liquidation or dissolution.

December 22, 2022, we issued 100,000 common shares in conjunction with stock-based compensation awards.

There were 11,784,280

shares issued and outstanding as of June 30, 2024, and 2023, respectively.

For the year ended June 30,

2025, no shares of common stock were issued, and there were 11,784,280 shares issued and outstanding as of June 30, 2025, and 2024.

have been authorized to issue 10,000,000 shares of preferred stock.

3 unchanged sentences

NOTE 9 – RELATED PARTY TRANSACTIONS

We entered into a Forbearance

Agreement with Mr.

Kim on September 23, 2024, under which Mr.

Kim agreed to defer a $ 1,250,000 bonus previously earned by him in exchange

for the Company’s agreement to allow Mr.

Kim to defer payment of the $ 1,000,000 settlement amount owed by Mr.

Kim to the Company

under a Settlement Agreement, dated June 12, 2024.

On January 16, 2025, we accrued

the deferred incentive bonus of $ 1,250,000 to O.C.

Kim, our President, and recognized a receivable for the deferred $ 1,000,000 settlement

amount owed by Mr.

Kim to the Company.

As of June 30, 2025, no payment for the accrued bonus has been made to Mr.

Kim by the Company,

and the receivable of $ 1,000,000 from Mr.

Kim was partially settled through the May 8, 2025 option repurchase transaction, in which the

$ 337,404 net proceeds otherwise payable to Mr.

Kim were applied against the receivable.

This leaves a remaining settlement balance of

$ 662,596 owed by Mr.

Kim as of June 30, 2025.

On May 8, 2025, we entered

into an Option Repurchase Agreement with Mr.

Kim under which it repurchased certain vested options for a total value of $ 746,067 .

amount, $ 408,663 was withheld to satisfy applicable employee payroll and income tax withholding obligations in accordance with federal

and state tax requirements, and the remaining $ 337,404 , which represented the net amount otherwise payable to Mr.

Kim in cash, was applied

in full to offset his receivable balance with the Company.

No cash was paid directly to Mr.

Kim in connection with this transaction.

On May 14, 2024, we entered

into an Agreement for Formation of a Joint Venture Corporation (the “Agreement”).

Under the terms of the Agreement, the parties

formed a Nevada corporation, Sigbeat, to be owned 60 % by Franklin and 40% by its EMS partner, Forge.

The parties contributed a total of

$ 5,000,000 in capital, in accordance with their respective ownership interest percentages.

Under the terms of the Agreement, Sigbeat has

a Board of Directors consisting of three members, of whom two are to be appointed by the Company and one appointed by Forge.

engage in worldwide sales, marketing, customer support and operations for telecommunications modules under such brands or designations

as the Board of Directors of Sigbeat determine.

Pursuant to the Agreement,

in July 2024, Sigbeat entered into a stock subscription agreement with Forge, for the purchase of 400,000 shares of Common Stock, representing

40% of the total outstanding Common Stock of Sigbeat.

On December 23, 2024, and January 9, 2025, we contributed $ 600,000 and $ 2,400,000

for Common Stock, respectively, and, on January 16, 2025, Forge contributed $ 2,000,000 for Common Stock.

On June 20, 2024, we entered

into a Purchase and Supply Agreement with Forge.

This Agreement outlines the terms under which we purchase certain products from Forge

for resale to our customers.

For the years ended June

30, 2024, and 2023, there have not been any transactions entered into or been a participant in which a related person had or will have

a direct or indirect material interest.

30, 2025 and 2024, we purchased EMS from Forge in the amount of approximately $ 13.7 million and $ 177,000 , respectively, and had related

accounts payable of approximately $ 5.6 million and $ 177,000 as of June 30, 2025 and 2024, respectively.

Excluding what was previously

described, there have not been any transactions entered into or have been a participant in which a related person had or will have a direct

or indirect material interest.

NOTE 10 – SUBSEQUENT EVENTS

The FASB issued ASC 855, “Subsequent Events.”

ASC 855 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial

statements are issued or are available to be issued.

The Company has evaluated all events or transactions that occurred after June 30,

2024, up through the date the financial statements were available to be issued.

May 14, 2024, the Company entered into an Agreement for Formation of Corporation (the “Agreement”) with MeiG Smart Technology

(“MeiG”), a leading supplier of cellular modules, IoT terminals and wireless data solutions.

Under the terms of

the Agreement, the Company and MeiG will form a Nevada corporation to be owned 60% by Franklin and 40% by MeiG.

The Company will contribute

$3,000,000 to the new corporation and MeiG will contribute $2,000,000.

Under the terms of the Agreement, the new corporation will have

a Board of Directors consisting of three members, with two to be appointed by the Company and one to be appointed by MeiG.

The new company

will engage in worldwide sales, marketing, customer support and operations for telecommunications modules to be provided by MeiG, under

such brands or designations as the Board of Directors of the new company will determine.

As of September 30, 2024, no contribution was

committed by the Company and MeiG.

On September 23, 2024, the Board

acknowledged that Mr.

Kim had earned an incentive bonus of $1,250,000 for negotiating and securing a joint venture agreement with MeiG

Smart Technology Co., Ltd.

However, the Company and Mr.

Kim entered into a Forbearance Agreement, dated September 23, 2024, under which

Kim agreed to defer payment of the bonus, in exchange for the Company’s agreement to allow Mr.

Kim to defer payment of the

$1,000,000 settlement amount owed by Mr.

Kim to the Company under a Settlement Agreement, dated June 12, 2024.

The forbearance is to

Kim time to pursue remedies with the State of Nevada (See “Business—Shareholder Litigation—Short Swing Profits

Litigation”).

Other than what was described

above, the Company did not have any material recognizable subsequent events required to be disclosed to the financial statements as of

September 30, 2024.

The FASB issued ASC 855,

“Subsequent Events.” ASC 855 establishes general standards of accounting for and disclosure of events that occur after the

balance sheet date but before financial statements are issued or are available to be issued.

We have evaluated all events or transactions

that occurred after June 30, 2025, up through the date the financial statements were available to be issued.

We did not have any material

recognizable subsequent events required to be disclosed to the financial statements as of June 30, 2025.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures